The nation's largest provider of student loans, Sallie Mae, confirms it has agreed to sell the company to a group of investors for about $25 billion.
The buyer is an investor group led by the private equity firm J.C. Flowers, paying $60 a share for the company.
Under the pact, J.C. Flowers and another private-equity firm, Friedman Fleischer and Lowe, will own a little more than 50 percent of the company.
Bank of America and J.P. Morgan Chase will also be buying in.
Sallie Mae's independent board members have unanimously approved the agreement and urge shareholders to approve the agreement.
Sallie Mae's current management will continue to lead the company and will remain based in Reston, Virginia.
Sallie Mae, formally known as SLM Corp., was created by Congress in 1972 as a company to which private lenders could sell their student loans. But it was privatized in the 1990s and became a fully independent, publicly traded company in 2004.
While it is now independent, Sallie Mae faces considerable congressional scrutiny because many student loans are federally subsidized.
House Education and Labor Committee Chairman George Miller, D-Calif., said Friday that a buyout by a private firm raises concerns about a lack of public disclosure of Sallie Mae's actions, since they would no longer be subject to regulation by the Securities and Exchange Commission.
"It is abundantly clear that the lack of public disclosure required by both student lenders and schools has undermined the credibility of the student loan industry," Miller said in a statement. "The American people must be able to hold lenders and schools accountable to ensure that federal student aid dollars are being properly used."
On Wednesday, Sallie Mae settled an investigation launched by New York Attorney General Andrew Cuomo by promising to alter its business practices and pay $2 million into a fund to educate students and parents about the financial aid industry.
Cuomo's office has been investigating kickbacks by loan providers to school officials who steer students toward particular lenders.
Miller's committee and the Senate education committee are also investigating the student-loan industry.
Sallie Mae, with 11,000 employees and $1.2 billion in annual profits, is by far the largest lender in the $85 billion student loan industry.