Sallie Mae’s chairman sells 400,000 shares

SLM Corp., the student loan provider better known as Sallie Mae, said Monday that Chairman Albert Lord had sold 400,000 of the company’s shares in open market transactions that were completed last week.

The sales came ahead of Monday’s 8.8% drop in Sallie Mae shares, after the Bush administration surprised Wall Street with a proposal to slash subsidies paid to financial institutions that make college loans.

Sallie Mae, which is based in Reston, Va., said Lord sold his shares to raise cash for other projects.

The administration’s proposal, released Monday for the fiscal year starting Oct. 1, slashes the federal fees and other subsidies that make student loans more profitable for lenders such as SLM.

Sallie Mae shares fell $4.09 to $42.37.