Sallie Mae ( SLM) rocketed 20% after an investor group led by J.C. Flowers agreed to pay $60 a share, or $25 billion, in cash for the student lender.

J.C. Flowers along with private-equity firm Friedman Fleischer & Lowe will invest $4.4 billion and own 50.2%, and Bank of America ( BAC) and JPMorgan Chase ( JPM) each will invest $2.2 billion and each will own 24.9%.

Sallie Mae's current management will stay on. The buyers' press release presents this development as "ensuring that it will continue to adhere to the New York Attorney General's Student Loan Code of Conduct, which Sallie Mae adopted April 11." Sallie settled a probe of allegedly deceptive practices with the state that day, agreeing to change some practices and pay $2 million into a national education fund.

Shares rose $9.16 to $55.92.

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