
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, May 4, 1995                   TAG: 9505040111
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

STUDENT LOAN AGENCY ASKS TO GO PRIVATE

The Student Loan Marketing Association, the government-sponsored company that buys and services student loans, asked Congress on Wednesday for permission to privatize.

``The time is right to develop an orderly, workable program to privatize Sallie Mae,'' said Lawrence A. Hough, president and chief executive officer, referring to the company's nickname.

Sallie Mae, which was created by Congress in 1972 to help broaden the private market for student loans by providing cash to lenders, is owned by stockholders.

It has been in a quandary since the Clinton administration proposed a switch from a guaranteed student loan system to a direct student loan system.

Under the direct system, the federal government loans students money itself, eliminating the role now played by banks, guaranty agencies and secondary markets.

Sallie Mae also also has sought to go private so it can move into areas of business not covered by its congressional charter.

``We remain committed to supporting the financing needs of students, parents, schools and lenders,'' said Hough. ``We do not, however, need federal sponsorship to do this successfully.''

Karen Barnes, a spokeswoman for the subcommittee on postsecondary education, said the panel's chairman, Rep. David McIntosh, R-Ind., joined Democrats on the panel in supporting the idea.

by CNB