October 5, 2007
Sallie Mae Deal Called Off in the Face of Subsidy Cuts
A $25-billion takeover of Sallie Mae that was announced in April was called off last week, the victim of a new law that will cut federal subsidies to student-loan providers.
President Bush signed the law, the College Cost Reduction and Access Act of 2007 (HR 2669), last week. Among other things, the law will cut subsidies to for-profit lenders by 0.55 percent. It is the second cut in federal subsidies to student lenders in the last two years.
Wall Street had been hinting in
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