Sallie Slumps on Dividend Talk

CEO Albert Lord suggested the company could cut its dividend.
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Shares of student loan lender

Sallie Mae

(SLM) - Get Report

plunged nearly 20% Wednesday, after Chairman and CEO Albert Lord said it may have to cut its dividend amid rising loan defaults, according to published reports.

Breaking Down Sallie Mae CEO's Sailor Talk

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In a conference call intended to soothe investor fears in the wake of Sallie's guidance warning last week, Lord said the company plans to "look at the dividend in the second half of the year," as it seeks to shore up its balance sheet, according to the

Associated Press

.

Lord frustrated analysts on the call by not being more specific about the company's plans, said the

AP

.

Sallie shares were trading down $5.83 to $23.04 in recent trading, a 52-week low. The stock has slumped almost 28% since Dec. 12, when Sallie said its attempt to revive a buyout deal with private equity firm J.C. Flowers

was dead and lowered its fourth-quarter and 2008 outlooks.

Student loan buyer

First Marblehead

on Dec. 7 said it would

slash its dividend to 12 cents a share from 27.5 cents a share amid the difficult lending environment.