Student Loan - Loans and Debt Consolidation

SALLIE MAE MAY CUT JOBS BY A THIRD BIZJOURNALS COM

Sallie Mae may cut jobs by a third

Sallie Mae will reduce its staff by almost a third, if Congress approves current legislation requiring all federal student loans to be made by the federal government.

Reston-based SLM Corp. NYSE:SLM has a large employment base in Indiana. State and local officials there plan to meet with Sallie Mae employees on Thursday to discuss the potential job shifts.

The legislation, approved July 21 by the House Education and Labor Committee, would switch all new federal loans to direct lending, rather than having the Education Department run competing loan systems through private lenders such as Sallie Mae and Citigroup Inc. s Student Loan Corp.

Sallie Mae is the largest U.S. provider of student loans and manages $188 billion in educational loans and more than $19 billion in college savings plans.

If Congress approves the measure, it would go into effect as early as July 2010. It is estimated to save $87 billion over 10 years and direct the savings back into the federal deficit, Pell grants and early-childhood education grants.

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