Sallie Mae said to agree to sale

SLM Corp., the nation’s largest provider of student loans, better known as Sallie Mae, has reportedly agreed to be sold to two private investment funds and a pair of banks for $25 billion, according to people familiar with the plan.

The Wall Street Journal is reporting today that investment funds JC Flowers & Co. and Friedman Fleischer & Lowe plan to take 50.2% ownership of the newly private firm. JPMorgan Chase & Co. and Bank of America would each take a 24.9% stake.

The plan to take SLM private comes at a time of political scrutiny of the student-lending industry by Congress and others.

House Education and Labor Committee Chairman George Miller (D-Martinez) said Friday that a private buyout raised concerns about a lack of public disclosure because the company would no longer be subject to Securities and Exchange Commission regulation.

Reston, Va.-based Sallie Mae was created by Congress in 1972 as a company to which private lenders could sell their student loans. But it was privatized in the 1990s and became a fully independent, publicly traded company in 2004.

The company, with 11,000 employees and $1.2 billion in annual profit, is by far the largest lender in the $85-billion industry.

The investment group plans to pay $60 a share for the student lender, financed with $16.5 billion in debt and $8.5 billion in equity, the Journal said.

SLM stock soared $6.01 to $46.76 Friday on reports of buyout talks in the New York Times.