Sallie Mae is interested in buying student lenders that are facing the end of the Federal Family Education Loan Program (FFELP), according to a Dow Jones report. This was announced at an investor conference held on Wednesday, the report said.
According to the Dow Jones report, Sallie's Vice Chairman and Chief Financial Officer Jack Remondi announced to participants at the Barclays' Financial Services Conference held in London that Sallie might be interested in exploring Citigroup's student lending operations. Citi is the next largest player in the industry.
Previously, Citigroup had placed its 80%-owned Student Loan Corp. in Citi Holdings, which is the bank's line of non-core businesses and which it has said it wants to exit as soon as possible.
The company stated in its first-quarter earnings call that it was interested in purchase the federal loan portfolios of lenders that will be in runoff mode once new originations stop July 1.
Remondi also noted that even though Sallie Mae won't be originating new loans, its $147 billion federal loan portfolio isn't winding down right away. The average life of Sallie Mae's federal loans is 7.8 years, according to Dow Jones.
Remondi also mentioned that Sallie Mae's private loan portfolio is still improving as it requires more students to have co-signers, Dow Jones reported.