Sallie Mae falls as financials tumble
Shares of Sallie Mae, the nation’s largest student lender, declined Thursday amid deepening investor anxiety over financial companies on Wall Street.
Shares of Sallie Mae (SLM, Fortune 500), formally called SLM Corp., dipped 43 cents, or 3%, to $13.90 in midmorning trading.
The decline followed an upward spike Wednesday, when Sallie Mae announced it had received funding under a new government backstop that will allow it to make around $20 billion in new federally-guaranteed student loans this academic year.
Reston, Va.-based Sallie Mae and other student lenders came under credit pressure and began pushing for federal help early this year when the $330 billion market for auction-rate securities collapsed.
In May, the Bush administration agreed to have the government buy up their student loans to ensure the companies have access to capital, following Congress’ enactment of legislation giving the Education Department the authority to do so cashadvance.com. The funding that Sallie Mae received Wednesday was the first under the new program.
"We had a good day yesterday," Sallie Mae spokesman Tom Joyce said, noting that the share price appeared to be slipping Thursday, in line with market weakness in the financial sector. "We’re focused on the long term here, not the day-to-day stock price."
In recent days, several big banks and other student lenders have announced that they are reducing student loan programs or eliminating them altogether.
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