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Sallie Mae Student Loans To Be Sold To JP Morgan Chase, Bank of America and Two Private Equity Firms

Sallie Mae student loans, the largest lender of student loans in the US.

According to the New York Times, Sallie Mae student loan services, the largest lender of student loans in the US has been sold to JP Morgan Chase, Bank of America and two private equity firms for $25 billion. From the NYT:

Sallie Mae Student Loans is both a lender and a debt collector, making profits on both sides of its student loans. Last year, the company earned $1.2 billion and generated a lot of cash that makes it attractive to private equity buyers. Even so, some Wall Street analysts believe that it is a poor candidate to be saddled with debt because its business relies on razor-thin interest margins and the use of derivatives to manage its exposure to interest-rate swings.

... Currently, the company is carrying $142 billion in private student loans and guaranteed federal student loans on its books, about 27 percent of American student loans in the United States.

While 85 percent of its business is currently federally guaranteed student loans, the company could also shift into the higher-interest and faster-growing market for private student loans, which unlike guaranteed federal student loans, is not subsidized by the federal government.

The student lending industry has been under quite a bit of scrutiny for lending practices that included incentives for colleges and universities to leave the US Government Direct Lending program, as well as offering monetary and gift incentives to officials in charge of making decisions about student lending.

Sallie Mae Student Loan Services itself recently settled a case with the New York Attorney General and will pay $2 million into a fund to educate students and parents about the financial aid industry. —MEGHANN MARCO

Story at http://consumerist.com/consumer/student-loans/sallie-mae-to-be-sold-to-jp-morgan-chase-bank-of-america-252641.php

SLM Corporation (NYSE: SLM), commonly known as Sallie Mae student loans, is the nation's leading provider of saving- and paying-for-college programs. The Sallie Mae student loans manages $160 billion in education loans and serves nearly 10 million student and parent customers. Through its Upromise affiliates, the company Sallie Mae student loans also manages $19 billion in 529 college-savings plans, and 8 million members have joined Upromise to help save for college with rewards on purchases at nearly 70,000 places. Sallie Mae student loans and its subsidiaries offer debt management services as well as business and technical products to a range of business clients, including higher education institutions, student loan guarantors and state and federal agencies. More information is available at www.salliemae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

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Chase Private Student Loans (also known as alternative student loans or education loans) can help for all of your higher education needs—from undergrad through graduate/professional school.

As you determine the best way to finance your college education, you should consider the full range of student financial aid options available. Private student loans, like the Chase Private Student Loan, can be used either alone or when federal student loans, grants and other forms of student financial aid are not sufficient to cover the full cost of higher education.

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