NEW YORK -- The Student Loan Marketing Association is serious about pursuing a charter change that would remove it from the embrace of governments, but analysts say any early transformation would face roadblocks.

Both houses of Congress have proposals that would include a six-month feasibility study on how Sallie Mae could switch charter. A spokeswoman said the agency would be ready to move if given the green light.

Sallie Mae's stock has been under pressure ever since the Clinton administration proposed changing the student loan system to rely on direct lending by government. Such a system would bypass Sallie Mae and the financial institutions that historically have originated students loans.

Entering New Lines of Business

If it changed its charter, Sallie Mae would presumably be free to get into businesses such as the financing and processing of credit cards and mortgages, which might help offset the loss of business expected with direct student lending. But analysts say Sallie Mae would also be losing advantages.

As a government-sponsored enterprise, Sallie Mae is exempt from all state and local taxes, except property taxes. And because of implicit government guarantees, Sallie Mae pays less in funding costs. Despite its AAA rating, "there's no question the debt cost would be higher," said Gary Gordon, an analyst at PaineWebber Inc.

And with massive changes expected in the student loan program, Congress may still be counting on Sallie Mae to keep providing a secondary market for student loans, analysts said.

Congress Seen as Unlikely to Agree

"They need a congressional mandate to have their charter changed," said Frank Suozzo, and analyst at S.G. Warburg & Co. "I'm not sure there is a very high probability that will happen. I think Congress is going to want Sallie to continue in its existing program."

"The government needs [Sallie Mae] as a lender of last resort for the next few years," said Peter Treadway at Smith Barney, Harris Upham & Co.

Proponents of direct lending say it would save $4.3 billion over five years because the United States would not have to pay the middlemen an allowance on the loans.

The current rate paid under the guaranteed student loan program is 310 basis points over the 90-day Treasury bill rate. Under a Senate compromise proposal, that allowance would be cut to 250 basis points, and direct lending would be phased in to 50% of the program by 1997-98.

A Senate-House conference committee must produce a final version. The House has approved President Clinton's plan, using the Internal Revenue Service as collection agent.

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