S&P drops Sallie Mae outlook to negative

Standard & Poor's said it revised its outlook on SLM Corp. to negative from stable.

At the same time, the agency said it affirmed the ratings, including the BBB- long-term counterparty credit rating on the company.

"The negative outlook reflects its concern that the proposed changes to student lending as articulated in President Obama's budget have the potential to adversely affect SLM's federally guaranteed student-lending business," said S&P credit analyst Adom Rosengarten.

"These changes could increase the credit risk of the company's loan portfolio and potentially reduce its profitability."

Nonetheless, the agency said it recognizes that there are significant challenges to implementing a full migration of student lending to the government's Direct Lending Program.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.