RESTON, Va. – Sallie Mae, a key provider of liquidity for the student loan market, reported a third quarter loss of $159 million yesterday, as strains on the credit markets pushed its funding costs higher.
Private loan delinquencies increased during the quarter, mainly because of seasonal factors and the continued weakening of the U.S. economy. To reflect a more conservative outlook over this year and next, Sallie Mae increased its provisions for loan losses.
For the first nine months of the year, Sallie Mae reported just $3 million in net income, down from $739 million for the same period last year.
The company is the leading provider of student loans in the country, and also a key conduit to the secondary market, buying and securitizing the majority of student loans originated by credit unions.
At the end of the third quarter Sallie Mae’s student loans under management rose to $177.7 billion, up from $159.8 billion a year ago.
