SLM Corp, the biggest U.S. education lender, announced on that it will continue to make loans guaranteed by the government.

On Wednesday Education Secretary Margaret Spellings said the Education Department would buy some of the loans, allowing companies to have more funds to buy additional loans.

Previously, other lenders for college students had stopped making the loans because the Federal government stopped providing subsidies.

Sallie Mae's chief executive officer Albert Lord told college administrators in a conference on Wednesday that the government plan was quite hopeful.

He said the company would continue to make loans throughout the 2008-2009 school year.

Shares of Sallie Mae rose $1.22, or 5.87 percent to $22.00.