Sallie Mae To Split Into Separate Companies Within 12 Months

Source: AP / The Huffington Post

NEWARK, Del. — Sallie Mae plans to split into two separate, publicly traded companies. The student loan giant also named John Remondi as its CEO.

Sallie Mae, formally named SLM Corp., said Wednesday that the two separate companies – an education loan management business and a consumer banking business – would help unlock value and boost its long-term growth potential.

The education loan management business would include the company’s portfolios of federally guaranteed and private education loans, as well as most related servicing and collection activities. Remondi will continue as its CEO.

The principal assets of the business are likely to include approximately $118.1 billion in federally guaranteed loans, $31.6 billion in private education loans, $7.9 billion of other interest-earning assets; and a loan servicing business with about 10 million student loan customers. This includes 4.8 million customer accounts serviced under Sallie Mae’s contract with the U.S. Department of Education.

To read this article in its entirety visit The Huffington Post.

  • So
    which side of SallieMae is going to keep their portfolio of the
    predatory private loans they tricked for-profit college students in to
    skirt 90/10 regulations? Before Obamacare, SallieMae brokered Fed loans,
    they tricked students into 1 dollar of private student loans for every 9
    dollars of Federal Pell/loans they got. SM then traded those bad assets
    on Wall Street, ala the housing crisis. Obamacare removed their
    middleman status. To this day though, SallieMae still: Services Federal
    loans behind the scenes, Guarantees Federal student loans, Measures the
    cohort default rates/headhunts them, and collects Federal student loans
    (Garnish first, ask for payments last). I’m pretty pissed to see they
    still exist to this day, even if they are splitting. Al Lord got to
    take his pilfered money and run. The bad private loans are still in
    existence. We’re still trapped.