Sallie Mae (NYSE:SLM) is best known as the biggest student loan provider in the US, but the firm also houses a large consumer banking unit. Perpetual concerns over student loan defaults, political risks, and regulatory risks have long held SLM's multiple way-down (today around 8.5X). While there is relatively little that can be done to increase the multiple on the student lending portion of the business, the banking business is woefully undervalued and tarnished by its ties to the student loan business. Frankly, in some respects, the regulatory scrutiny is probably greater on the student loan business because of the banking component as well. Put simply, if there was ever a company where a break-up made sense, it...
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