Sallie Mae Partners with KKR to Fund More Than $2B in Private Education Loans
Sallie Mae has unveiled a multi-year strategic partnership with global investment firm KKR in an agreement designed to expand funding capacity and enhance capital efficiency for the student lender. Under the terms, KKR expects to acquire an initial seed portfolio of private education loans, followed by a commitment to purchase at least $2 billion in newly originated private education loans each year over an initial three-year period. KKR’s investment will be made through its credit funds and accounts, utilizing the firm’s asset-based finance strategy.
As part of the transaction, Sallie Mae will continue to manage all customer-facing relationships and retain servicing responsibilities for the loans sold to KKR. The company will earn recurring fees for servicing, program management, and providing industry expertise—creating a scalable, capital-light revenue stream.
“We believe this inaugural partnership with KKR will unlock the potential for off-balance-sheet capital efficiency, create a more resilient, capital-light, and consistent earnings profile, and allow us to serve more students and families,” said Jon Witter, CEO of Sallie Mae.
Avi Korn, Managing Director and Co-Head of Asset-Based Finance at KKR, added, “This transaction exemplifies the opportunities we’re seeing across our Asset-Based Finance strategy to deploy long-term, flexible capital in support of high-quality, scaled financial institutions.”
Morgan Stanley & Co. LLC served as sole structuring advisor to Sallie Mae on the partnership.