Sallie Mae, the largest U.S. education-finance company, is making a bet on the future of private student debt, a business under fire in Washington for marketing high-interest-rate loans before the financial crisis.
SLM Corp. dealt bondholders a blow as the student loan company prepares to move cash-generating assets out of their reach and rely more heavily on secured funding as it seeks to split into two separate entities.
SLM Corp., the student lender known as Sallie Mae, is seeking to separate its education loan management and consumer bank businesses into two publicly traded entities. Its bonds fell the most in at least four months.
Illinois Attorney General Lisa Madigan opened an investigation of loan servicing complaints against SLM Corp., the student lender known as Sallie Mae, amid growing scrutiny of education debt, her spokeswoman said.