A federal program critical to SLM Corp.'s funding plan is slated to kick off within the next 10 days, according to Albert Lord, the chief executive of the lender better known as Sallie Mae.

The Department of Education's asset-backed commercial paper facility would allow the lender to fund as much as $16 billion of federal student loans, Lord said during a conference call Thursday to discuss its first-quarter results.

Sallie, which makes private and federal student loans, said its first-quarter net loss shrank 79.7% from a year earlier, to $21.1 million, or 10 cents a share.

The latest results included $203 million of private education loan losses and $139 million of private education loan chargeoffs.

On average, analysts polled by Thomson Reuters had expected earnings of 12 cents a share.

Total interest income dropped 34%, to $1.24 billion. Sallie cited a discrepancy in borrowing rates in the commercial paper market and a key short-term interest rate benchmark.

Its loan originations climbed 10%, to $6.6 billion. Private education loans dropped 40%, to $1.5 billion, as a result of a tightening of underwriting standards and the elimination of nontraditional private loan originations.

The lender increased its loan-loss provision by 82%, to $250.3 million.

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.