Sallie Mae Splits Into Two This Week
"SLM Corp., the student-loan giant based in Newark, Del., will split into a loan servicer and a consumer bank this week, in a bid to gain a clearer profile for investors," The Philadelphia Inquirer reports.
"The separation, in the works for almost a year, will happen Wednesday, when shareholders will receive a new share in a loan-servicing company called Navient Corp. for every SLM share they own.
Navient, which announced this month that its headquarters would be in Wilmington, will take over the servicing of federal government-backed student loans with balances of $103.2 billion and $31 billion of private loans. ...
Among the sellers of those loans will likely be the company Navient is leaving behind, which is commonly known as Sallie Mae, a name dating to its days as a federal government-sponsored enterprise (akin to Fannie Mae and Freddie Mac in housing) created in 1972 to make more money available for student loans.
Sallie Mae will keep its headquarters in Newark, highly visible to southbound traffic on I-95, while diversifying into areas such as personal loans for recent graduates with professional degrees and secured loans for health-care professionals.
Sallie Mae has told investors it expects to be the largest private student lender. It made $3.76 billion in education loans last year and has set a target of more than $4 billion in education loans annually."
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