NEWARK, DE — Sallie Mae has entered into a multi-year strategic partnership with global investment firm KKR, a deal designed to expand the lender’s origination capacity while shifting a significant portion of new private education loans off its balance sheet.
Under the agreement, KKR will purchase an initial seed portfolio of private education loans and commit to buying at least $2 billion in newly originated loans annually over an initial three-year period. The investment will come through KKR-managed credit funds and accounts under its Asset-Based Finance strategy.
Sallie Mae will keep its customer relationships and continue servicing the loans sold to KKR. The lender will earn ongoing fees for servicing, program management, and its sector expertise—providing a recurring revenue stream even as the loans move off its books.
The company said the structure offers scalable, capital-efficient funding intended to support stronger loan origination growth. CEO Jon Witter said the partnership is expected to deliver a more resilient and consistent earnings profile while allowing the company to serve a broader base of students and families.
“We believe this inaugural partnership with KKR will unlock the potential for off-balance sheet capital efficiency,” Witter said, calling it a first-of-its-kind deal for the business.
Avi Korn, managing director and co-head of Asset-Based Finance at KKR, said the firm sees the arrangement as an example of how long-term, flexible capital can support established financial institutions. He cited Sallie Mae’s history of disciplined underwriting as a key factor in the partnership.
Morgan Stanley & Co. LLC advised Sallie Mae on the transaction.
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