The largest U.S. student loan company, SLM Corp. also known as Sallie Mae reported a loss of $123 million. Last year it made a profit of $ 266 million. The main reason of this huge loss is because it failed to make a provision for $484 million loss it sustained due to it’s involvement in Hedging and derivative market related activities.
In addition to above loss, it also set aside another $278 million for student loans that will go bad this year. 
Although the core profit in last quarter was $170 million but it lost money as it engaged itself with toxic investments like hedging and derivatives.
Analysts were expecting a decrease in profit but no one seemed to be ready for such a phenomenal loss. The company stocks were down to $9.38 which is more than 7.8% decrease from before the announcement. The company stocks remained volatile during past 12 months and price varied between $3 and $14 per share.
At the end of academic session of 2008 – 2009, Sallie Mae issued loans of about $20 billion to students. This is 11 percent higher than last year. The company has been reported to issue even larger number of loans this year.
