Sallie Mae, the largest student lender, said Friday it would no longer offer federal consolidation loans.
The move, announced to its customers today, comes as the U.S. faces a steep credit downturn which has led to similar decisions at other student lenders. Federal consolidations are among the least profitable transactions for firms.
Sallie Mae noted that it would no longer pay the current loan-origination fee of 1.5 percent on behalf of students with Stafford federal loans and other loans before May 2.
SLM Corp. shares rose 23 cents, or 1.31 percent, to close at $17.85.