WASHINGTON (5/31/13)--Student-loan firm Sallie Mae, the largest U.S. private lender to students, announced Wednesday it intends to split itself into two companies--an education-loan management business and a consumer-banking operation.
In 2010, after the U.S ended a program that allowed institutions such as Sallie Mae to originate federally guaranteed student loans, the company realigned its business to concentrate on private originations (The Wall Street Journal May 29).
Salle Mae continues to manage a big portfolio of the federally guaranteed loans, called Federal Family Education Loan Program loans, which generate income and cash flow, the Journal said.
Ninety-five percent of Sallie Mae's assets will be owned by its education-loan management business.
Sallie Mae also named Chief Operating Officer John F. Remondi as CEO of the education-loan management company, effective immediately. He succeeds CEO Albert L. Lord, who accelerated his retirement plans.
Remondi served as president and chief operating officer since 2011. Prior to that, he was vice chairman and chief financial officer.