Sallie Mae CEO Steps Down; Replacement Named

As part of the on-the-way-to-private plan, SLM Corporation – the nation’s largest student loan provider – is losing old CEO Thomas J. Fitzpatrick, who will be replaced by CFO C.E. Andrews.

Fitzpatrick gave the “pursuing other interests” reason, second only to “spending more time with my family.”

While initially boat-rock-worthy, the move could help dispel concerns after this spring’s student loan scandal, wherein it was revealed that college administrators were treated like rock stars by student loan companies.  The company agreed last month to be sold to private-equity firm J.C. Flowers & Co. and three other investors in a $25 billion deal — one of the largest private buyouts ever.

The company’s board of directors and the Flowers firm agreed that Sallie Mae’s corporate governance couldn’t be sufficiently reformed without the removal of top management, an executive familiar with the buyout deal said Tuesday. He spoke on condition of anonymity because of the sensitive nature of the issue.

Over the next few weeks, Fitzpatrick, 58, will remain at Sallie Mae in an advisory role to facilitate the transition, the company said in its announcement.

He will receive $4.1 million in severance payment from Sallie Mae, according to a regulatory filing.