An investor group led by private-equity firm J.C. Flowers agreed to take SLM Corp. private in a transaction valued at some $25 billion.
Flowers and another private-equity firm, Friedman Fleischer & Lowe, plan to invest $4.4 billion and own 50.2 percent of Sallie Mae, as the student-loan company is widely known. Bank of America and JPMorgan Chase each will invest $2.2 billion and own 24.9 percent.
Current management at Sallie Mae will continue to lead the company.
The company also noted that it will comply with the New York Attorney General’s Student Loan Code of Conduct, which Sallie Mae adopted under a settlement announced on April 11. In addition, the company agreed not to give anything of value to colleges or their employees, and it will ensure that its employees never identify themselves to students as employees of the colleges. Sallie Mae also agreed to contribute $2 million to a fund for educating college-bound students about their loan options.
Sallie Mae, the largest student lender in the United States, originated $23.4 billion of loans last year.
The deal is subject to congressional scrutiny. Reuters reported that George Miller, chairman of the House Education and Labor Committee, stated: “At a time when the integrity of our nation’s student loan system has been called into question for many reasons, and given the checkered past of Sallie Mae, I will be interested — and the Congress will be interested — in learning more.”
Specifically, Miller reportedly said, he wants to know how the new owners will modify their operations and whether the change of control will be in the best interests of borrowers and their families.