Profits Plunge At Sallie Mae

RESTON, Va. - (01/20/06) -- Student loan giant Sallie Mae saidnet income slumped 34% for its fiscal fourth quarter to $431million, or 96 cents a share. As a result, net income for thefiscal year dropped 26% to $1.4 billion, or $3.05 a share. A majorcause of the drop in earnings was a decline in gains on derivativesthe student loan giant holds to hedge its loan portfolio from $507million in the fourth quarter of 2004 to just $70 million in thefourth quarter of 2005. Fourth quarter financials also include a$76 million charge to buy back the company's bonds issued while itwas a government sponsored enterprise, which it ceased being lastJanuary. Sallie Mae, formally known as SLM Corp., said itoriginated $4.6 billion in federally guaranteed student loans inthe fourth quarter and $21.4 billion for the year, making it thebiggest originator of guaranteed student loans in the country. Italso originated $1.4 billion in private school loans in the fourthquarter and $6.2 billion for the year. Over the last year SallieMae increased its student loan portfolio by 14% to $122.5 billion,the largest in the country.