April 6, 2009 / 12:34 PM / 10 years ago

UPDATE 3-Sallie Mae to shift 2,000 jobs to US from overseas

 * Moving overseas operations to United States
 * To make U.S. hires over next 18 months
 * Jobs pulled from India, Mexico and the Philippines
 * Move to cost about $35 million per year
 * Shares up 3.2 percent
 (Adds CEO comments, costs, background, byline)
 By Elinor Comlay
 NEW YORK, April 6 (Reuters) - Student loan company Sallie
Mae SLM.N plans to move its overseas operations back to the
United States, creating 2,000 domestic jobs, in what analysts
called an attempt to curry favor with the Obama administration.
 SLM Corp, as the company is legally known, said on Monday
it plans to add staff over the next 18 months in call centers,
information technology and operations support across the United
States. A spokeswoman said the company will pull jobs from
India, Mexico and the Philippines.
 The move will cost about $35 million per year, Chief
Executive Albert Lord said at a press conference attended by
Rep. Paul Kanjorski and Sen. Robert Casey, both Democrats from
Pennsylvania, where the new jobs will be located.
 "We have reversed our decision to move people offshore,"
Lord said at a press conference at the company's facility in
Wilkes-Barre, Pennsylvania, which will gain 600 new jobs.
 Analysts called the move a bid to build political capital
in Washington as the Obama administration plots major changes
to the student loan market.
 The administration has proposed a 2010 budget that could
hurt Sallie Mae's business by shifting all federal student loans
into a program administered by the Department of Education.
 Michael Taiano, analyst at Sandler O'Neill & Partners in New
York, said of Sallie Mae's maneuver, "Will it help them overturn
Obama's budget proposal? I don't think so."
 The company is likely hoping that moving jobs back to the
United States will earn it goodwill from the administration,
Taiano said, putting Sallie Mae in a better position when the
details of the student loan program are worked out.
 "It probably doesn't hurt to build up political capital,
and bringing jobs back to the U.S. certainly does that," he
said.
 Sallie Mae, the largest U.S. student loan company, employs
more than 8,000 people in the United States. It has struggled
during the credit crunch to finance the loans it makes to
students.
 "We were at a point where we could not make a student loan
at a profit," Lord said of late 2007 and early 2008, adding that
Obama's education plan sparked the company's jobs reversal.
 "The president's budget is often portrayed as bad for our
business, but I don't see it that way," he said.
 He said the White House wants student loans administered,
serviced and collected by the private sector, which bodes well
for Sallie Mae.
 The current loan system may need "a few tweaks" but it
essentially works and will yield the budget savings the
president wants, Lord said. "If I didn't feel that was going to
happen, we surely wouldn't be bringing 2,000 jobs back to this
country."
 The company reported a net loss of $216 million in the
fourth quarter, in which it made $4.8 billion in student loans.
 Last month, rating agency Standard & Poor's said Sallie Mae,
with $33.9 billion of rated debt, was at risk for a cut to junk
status from investment grade. Its shares have fallen 39 percent
this year.
 The shares were up 17 cents or 3.2 percent at $5.52 on the
New York Stock Exchange on Monday afternoon, off an earlier high
at $5.85.
 (Reporting by Elinor Comlay, additional reporting by Jonathan
Spicer; Editing by Derek Caney, John Wallace and Matthew Lewis)

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