Sallie Mae narrows loss
- April 23, 2009
Sallie Mae narrowed its first-quarter loss, but said it was hurt by the federal government’s attempts to stabilize the commercial paper market.
The Reston-based company, which is the largest student loan lender in the country, reported a $21 million loss for the quarter, compared with a $104 million loss during the same period last year.
“Ironically, positive action taken by the federal government to stabilize the commercial paper markets is adversely impacting student loans and student-loan backed securities,” Vice Chairman and CEO Albert L. Lord said in a statement.
The federal government tried to stabilize the commercial paper market, which is used for short-term borrowing. Most of the company’s loan portfolio earns interest based on commercial paper rates.
The student loan lender said private education loan originations fell to $1.5 billion, compared with $2.5 billion during the first quarter last year, primarily because of tougher underwriting standards. On the other hand, the company increased its government-backed loans to $6.6 billion from $6 billion a year ago.