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Reason Foundation

Sallie Mae Concludes Privatization

Geoffrey Segal
December 28, 2004, 11:40am

Nearly four years ahead of schedule... Sallie Mae, which is formally known as SLM Corp., has successfully refinanced more than $100 billion of government-sponsored enterprise, or GSE, assets in an accelerated privatization plan begun in 1997. The corporation set aside enough cash and U.S. Treasury securities in a special purpose trust to pay down the remaining principle and interest on $1.85 billion of outstanding GSE bonds. The move enabled the Treasury to sign formal documents officially separating Sallie Mae from the federal government. "We applaud the transformation of Sallie Mae into a wholly private company, dynamically increasing its options to provide financing services to students," Assistant Treasury Secretary Wayne Abernathy said at a document signing ceremony at Treasury's headquarters.


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