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took a swing at Moody's, the credit-ratings service, after it downgraded the big student-loan originator's debt to junk.

Moody's cited uncertainty surrounding Sallie Mae's cash flow as the Obama administration looks to pull the subsidies carpet out from under private lenders. The White House budget proposal for 2010 calls for the move to direct government loans as opposed to private-lender subsidies, which make up the bulk of Sallie Mae's loan portfolio. If the administration's plan -- which it believes will save $4 billion -- becomes law, most of those Sallie Mae loans will no longer be secured by the government against the possibility of default.

In a strongly worded press release issued Wednesday night, Sallie Mae responded by saying that its business remains strong and that Moody's central argument is far from a sure thing.

"Moody's conclusion rests mostly on its predictions of the political process surrounding the Federal Student Loan program," Sallie Mae's chief executive, Albert Lord, said in the release. "This seems to us inappropriately speculative and very premature, since any changes made to America's student-loan programs must be legislated by Congress -- a several-months process not yet started."

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Sallie Mae pointed to recent moves that raised $11 billion in capital, including the securitization and sale of student loans for $5 billion last month.

Lord called the downgrade "both unfortunate and surprising."

The company's CFO, Jack Remondi, weighed in as well. "It is difficult to understand how an enterprise with 80% of its assets guaranteed by the U.S. Government, over 70% of its assets funded to term and the strength of our franchise merits less than an investment-grade rating," he said.

Moody's reduced its rating on Sallie Mae's senior unsecured debt by two degrees, lowering it to "Ba1" from "Baa2."

The dispute between Moody's and Sallie Mae has been broiling since February, when Moody's first put the company on review for the downgrade. Its stock has lost more than half its value since then, tumbling from $11.67, which it reached on February 2, to its current price of $5.42 in Thursday trading, flat from the previous session.

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