SLM Corp. is interested in acquiring loan portfolios and servicing rights from major student lenders suffering from the termination of the Federal Family Education Loan Program, the company said at a webcast investor conference Wednesday.
SLM's vice chairman and chief financial officer, Jack Remondi, told participants at the Barclays Capital financial services conference in London that the company, known commonly as Sallie Mae, "would be interested in exploring" the student lending operations of Citigroup Inc., which is the next-largest player in the industry.
Citi has placed its 80%-owned Student Loan Corp. in Citi Holdings, its line of noncore businesses, which it has said it wants to exit as soon as possible. A Student Loan Corp. spokesman declined to comment.
In late March, lawmakers voted to eliminate the FFELP, ending fees paid by the government to banks that originated federally guaranteed loans. The loss of funding was a major hit for many originators, although four companies were chosen to service the loans that will now be originated directly through the government, helping soften the blow slightly. Sallie Mae was one of those companies.
"The declining business mode makes it, we think, a ripe opportunity for entities to exit the business, particularly if it's not material to them," Remondi said. "We are, we believe, the best positioned to take advantage of these acquisition opportunities to add to our revenue stream."
