Sallie Mae reports $1.6 billion loss
- January 24, 2008
by Jessica Sabbath
The country’s largest student lender reported Wednesday it had a $1.6 billion loss in the fourth quarter of 2008, compared with an $18 million profit during the same quarter last year.
Company CEO Albert L. Lord blamed the loss partly on providing too many loans to students who would have trouble paying them back. “Our cost of funds and loan loss expectations were impacted by weakening credit markets,” Lord said in a statement.
The company also was hurt by a federal law passed last year that reduced the amount of student loans the government guarantees and subsidizes.
The new law was one of the reasons potential buyers of the company cited for backing out of an offer to buy Sallie Mae last year.