SLM Holding Corp., the parent of Sallie Mae, announced plans Wednesday to buy Nellie Mae Foundation for $320 million.

The deal combines two student loan secondary marketing giants. Nellie Mae originated more than $375 million last year, and its $2.6 billion student loan portfolio makes it the seventh-largest federal loan holder in the nation. Sallie Mae owns or manages $47 billion.

The acquisition would be Sallie Mae's largest ever and is designed to increase the company's loan originations. Sallie Mae, the country's largest purchaser of student loans, is converting from a government-sponsored enterprise to a private company.

Sallie Mae chief executive officer Albert L. Lord said the combined company would originate $1 billion in loans next year.

Nellie Mae, originally known as New England Education Loan Marketing Corp., is the parent of Nellie Mae Corp.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.