With Newark-based Sallie Mae making plans to split its operations into two, speculation is emerging that a financial institution might snap up the student lender.
That was the topic of a recent Motley Fool column that went on to mention Bank of America and Wells Fargo as possible buyers of the company that employs about 1,100 in Delaware and is modestly adding to its staff.
The goal of the split is to separate older loans with poorer payment records from the newer loans that are performing better under the management team that uses the marketing and collection strategies employed by banks. Sallie Mae came to Delaware to tap into that expertise and hired former executives of MBNA, the credit card bank that was acquired by Bank of America. It later moved its headquarters from the Washington “Beltway,” to the former Nationwide-Continental American building near Christiana Hospital.
A former MBNA executive is slated to head the company that would be split off from Sallie Mae.
Sallie Mae has been adjusting to the decision by the federal government to lend directly to students. The big plus, as Motley Fool notes, is the ability to use credit scores and other factors to reduce the risk of new loans it makes. The government does not have the same banker-style emphasis.
The ability to use innovative strategies was discussed at an event that celebrated the 40th anniversary of Sallie Mae.
Sallie Mae also operates a profitable banking operation that might prove attractive to a potential buyer.
Not mentioned in the story is the increasing focus on student loan debt in the media and activist circles. The issue has made Sallie Mae a target of protesters, some of whom showed up and made their objections known outside the annual meeting.
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via 3 Potential Suitors for a Sallie Mae Spinoff | Philadelphia Citybizlist.
