Sallie Mae Discloses Probe Into Marketing
Profit Fell 96% In Fourth Quarter
By Kim Hart
Washington Post Staff Writer
Friday, January 19, 2007; Page D01
SLM Corp., the dominant college-student loan provider commonly known as Sallie Mae, yesterday reported a 96 percent drop in fourth-quarter profit and disclosed a federal probe into the company's marketing practices.
The news came the same week that the House of Representatives voted to cut federal loan interest rates by half over the next five years, a move that, if upheld by the Senate, could significantly erode Sallie Mae's future earnings.
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NEW YORK, Jan 19 (Reuters) - The New York Attorney General has asked student lender Sallie Mae for information concerning how it markets its preferred loan provider list to colleges and universities, according to a governmental filing.
The largest U.S. student loan provider, formally SLM Corp. (SLM.N: Quote, Profile , Research), said it received a letter on Dec. 28 from the state attorney general's office requesting documents shedding light on how colleges and universities use its preferred lender lists and how Sallie Mae markets those lists, according to a filing with the Securities and Exchange Commission on Thursday.
"The appearance of a conflict of interest at the consumer's expense raises flags here," Attorney General Andrew Cuomo said through a spokesman on Friday.
Sallie Mae said in the filing it was cooperating with the attorney general's office. Sallie Mae also said it could not predict the outcome of the request or its effect on its financial position or results of operation. (Additional reporting by Joe Giannone) |
