Lender Sallie Mae in talks to go private

Shares of Sallie Mae, the nation’s largest student-loan provider, jumped Friday following a newspaper report that it is in buyout talks with a private equity firm for more than $20 billion.

The New York Times reported Friday that Blackstone Equity Group is a potential bidder to take Sallie Mae private.

Reston-based Sallie Mae, formally known as SLM Corp., was created by Congress in 1972 as a company to which private lenders could sell their student loans. But it was privatized in the 1990s and became a fully independent, publicly traded company in 2004.

Sallie Mae declined to comment on the report.

“It’s our long-standing policy not to comment on market rumors and speculation,” spokesman Tom Joyce said.

Blackstone spokesman John Ford also declined comment.

Sallie Mae shares jumped in trading Friday on the New York stock exchange. The surge pushed Sallie Mae’s market capitalization from $16.7 billion to $18.9 billion.

The Times report, citing unnamed sources, said the acquisition could be for more than $20 billion. The Times reported that the negotiations appear to be at a late stage, but that numerous hurdles remain.

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While it is now independent, Sallie Mae faces considerable congressional scrutiny because many student loans are federally subsidized.

On Wednesday Sallie Mae settled an investigation launched by the New York Attorney general Andrew Cuomo by promising to alter its business practices and pay $2 million into a fund to educate students and parents about the financial aid industry.

Cuomo’s office has been investigating kickbacks by loan providers to school officials who steer students toward particular lenders.

Congressional committees in the House and senate are also running their own investigations of the student-loan industry.

Sallie Mae, with 11,000 employees and $1.2 billion in annual profits, is by far the largest lender in the $85 billion student loan industry.