(Reuters) - SLM Corp (SLM.N: Quote, Profile, Research), the student lender better known as Sallie Mae, plans to continue to make federally guaranteed student loans, ending fears the company might join the recent exodus from a market that has been rocked by the credit crisis, the Wall Street Journal said on Thursday.

On Wednesday, the U.S. Education Department outlined a two-part plan to carry out a congressional order to buy up federally-backed student loans at no net taxpayer cost.

The department said it will buy into temporary trusts that will be capitalized with federally guaranteed loans to provide more short-term liquidity for student lenders.

In a teleconference with college administrators on Wednesday, Albert Lord, Sallie Mae's chief executive, called the administration's plan "practical, workable and, maybe most of all, quite hopeful," the newspaper said.

He added that the financial terms outlined in the plan are only "barely okay," but sufficient to allow the largest U.S. student loan provider to continue making federally guaranteed loans throughout the 2008-2009 school year, the newspaper said.

Lord said that, because of the administration's plan, Sallie Mae's commitment to the government's Federal Family Education Loan Program is "virtually unbounded."

Under FFELP, government-subsidized banks make loans to students that are 97-percent guaranteed by the government.

Dozens of lenders have recently withdrawn from FFELP because they could no longer sell loans in the secondary market.

"These federal consolidation loans are the least profitable loans, which is why a number of lenders (including Sallie Mae) backed away from this business," Amy Junker, an analyst with Robert W. Baird & Co said.