On the eve of its sale, Student Loan Corp. reported a $540 million loss in the third quarter reflecting impairments on loans the Stamford-based lender is divesting to Sallie Mae and Citibank N.A.
Student Loan Corp. is based in Stamford and is controlled by New York City-based selling its private student lending business to Discover Financial Services.
Student Loan Corp. expects to record a $507 million gain before taxes in the current fourth quarter, reflecting the difference between the fair value and the carrying value of the company”™s secured borrowings collateralized by the defunct Federal Family Education Loan program.
Due primarily to the sale of FFEL loans to the U.S. Department of Education, Student Loan Corp.”™s loan portfolio decreased 13 percent from a year ago to $37.8 billion, most of which is slated to be sold to Sallie Mae and Citibank.
Student Loan Corp. lowered its allowance for loan losses to $37.6 million, down from more than $149 million a year ago.
