Sallie Mae Plans Early Privatization

- RESTON, Va. (01/25/02) - Sallie Mae, a wholly ownedsubsidiary of USA Education, Inc., said Thursday its board hasapproved an early privatization of the secondary market studentlender from government sponsored enterprise (GSE) status. Theprivatization, approved in 1996, is now targeted 2006, two yearsearlier than originally planned. Once Sallie loses its GSE statusthen credit unions may no longer invest in its securities. SallieMae, founded in 1973, was originally chartered to provide asecondary market for banks, credit unions and other providers ofguaranteed students loans. But under a corporate reorganizationsurrounding the 1996 privatization bill has allowed Sallie to beginoriginating student loans in direct competition with its creditunion and bank partners. Last year, Sallie originated $10.1 billionof student loans, the most in the country and more than four timesas much as any other lender.