Sallie Mae Student Loan Sell-off Eases Bite of Accounting Revamp

Student loan giant SLM Corp., known as Sallie Mae, warned investors last year that new accounting rules for bad loans would distort its balance sheet so much it would have to resort to unofficial metrics to convey its financial health.

The company reversed course Thursday, saying it would present official accounting metrics, after all, when the current expected credit losses (CECL) accounting standard goes live this year.

It’s able to do so by selling $3 billion worth of loans and using the sale proceeds to buy back $600 million of its stock, which means more earnings to spread among fewer ...