2,500 Sallie Mae jobs fall to new student loan law

NEW YORK (AP) - A new law that cuts banks out of the federal student loan business is costing 2,500 workers at Sallie Mae their jobs.

The nation's largest student lender has told 1,200 staffers in service centers in Killeen, Texas, and Panama City, Fla., they will lose their jobs by year-end. The remaining cuts will follow in 2011.

The cuts result from changes made to the federal student loan program as part of the health care reform signed by President Obama last month.

The law strips the middleman role in student lending away from banks. It's expected to save at least $60 billion. But it will also mean a drastic reshaping of Reston, Va.-based Sallie Mae, which wrote a record $7.7 billion in federal student loans in the first quarter.