Sallie Mae, the student-loan servicing company, will move its headquarters from Reston, Va. to a new office in Delaware next year, Sallie Mae chief executive Albert Lord and Delaware Gov. Jack Markell said in a statement. The company will likely locate near Newark, Del., where it currently has an office employing around 900.
Delaware's small Congressional delegation mostly backed Sallie Mae in its unsuccessful fight to prevent Congress from cutting the subsidy to Sallie Mae and other private companies that make student loans using government money. Sallie Mae says it will continue as a provider of higher-rate private student loans, and collecting government loans to students.
The new student loan law took effect yesterday, and Sallie Mae plans 30 percent cuts to its national workforce, notes bond analyst Kathleen Shanley of Gimme Credit LLC in a note to clients today. Sallie Mae is also weighing plans to set up a separate bank-holding company, according to analyst Michael Taiano of Sandler O'Neill + Partners.
Sallie Mae could spend up to $100 million on a new headquarters in an as-yet undisclosed location, and will hire contract workers in the Dover area to service loans, the governor's office said. "Or it could be $0," spokeswoman Martha Holler told me. "We haven't decided" on a new building, or not. Delaware will give Sallie Mae a grant of up to $3 million. The current Newark office is run by Jack Hewes of Malvern, a Norwood, Delaware County native who used to be an executive with the former credit card lender MBNA Corp. (Hewes' hometown corrected)