WASHINGTON — Sallie Mae says it cannot write money-losing student loans indefinitely.
Top executives are holding “daily deliberations” about just how long the nation’s largest student lender can afford to sacrifice its bottom line for the sake of college-bound Americans, said Sallie Mae chief executive Albert J. Lord on Thursday.
Experts said that, unless the government intervenes or market conditions rapidly improve, Sallie Mae could have no choice but to stop writing new federally backed loans.
House lawmakers approved a measure Thursday to boost the availability of credit for Sallie Mae and other student lenders, and analysts think the Treasury Department could act as soon as next week.
Sallie Mae lost $104 million in the first quarter as it grappled with higher borrowing costs, restructuring charges and other factors, though Lord said in a conference call with analysts that the company would not lower its full-year earnings target.
Shares of the Reston, Va.-based company climbed almost 6 percent Thursday but remained down 70 percent from last summer.
Even though the majority of student loans are highly rated and carry a federal guarantee, investor demand for securities backed by these assets has plummeted.
