Student Loan Xpress Closes; Is Sallie Mae Leaving the Federal student loan program?

According to the San Diego Business Journal, CIT has closed down it’s student lending company Student Loan Xpress.

Also, there are rumors swirling around that Sallie Mae may drop out of the FFELP lending program, leaving millions of students in the lurch.

The Chronicle of Higher Education is reporting that executives at Sallie Mae are eagerly waiting new lender rules from the Department of Education which are expected to be unfavorable to lenders. They report that:

“Sallie Mae executives, including the company’s president, C.E. Andrews, and chief executive, Albert L. Lord, have scheduled a conference call with colleges for Wednesday to discuss “critical information” about the lender’s participation in the federally guaranteed student-loan program, according to a company announcement.

Sallie Mae officials have not explicitly described any plan to stop issuing government-backed federal loans, though several officials involved in student lending who asked not to be identified by name because of the uncertainty, highly fluid nature, and huge stakes involved —have described company officials as promising to take that step if the Education Department offers terms they deem inadequate today. Sallie Mae officials declined to comment on the record.”