Citigroup exits student loan business

Financial services giant Citigroup said Friday it will sell off its student loan business to Sallie Mae and Discover Financial Services, a move that consolidates the sector after the federal government took over much of the business.

Sallie Mae paid $1.2 billion and Discover paid $600 million in the deal, which comes after legislation passed in July that enabled the Education Department to issue new federal student loans.

"It's basically fallout from the government takeover of the federal student loan program," said Matt Snowling, an analyst with FBR Capital Markets.

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- Posted: 2010-09-17 22:02:54

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