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The group of firms that have agreed to take Sallie Mae (NASDAQ:SLM) private for $25 billion dollars notified the lender that the college financial aid legislation pending in the House of Representatives and the Senate "could result in a failure of the conditions to the closing of the merger to be satisfied," according to a statement issued by Sallie Mae yesterday.

Sallie Mae says that they disagree with this statement and that the company "intends to proceed towards the closing of the merger transaction as rapidly as possible and will take all steps to protect shareholders' interests." The merger, which was announced in April, has been expected to close later in 2007.

The House passed a student loan bill today named the College Cost Reduction Act of 2007, which will increase the amount of financial aid available to students by $18 billion while decreasing federal subsidies to lenders like Sallie Mae. The White House threatened to veto the bill if it passes the Senate and makes it to the desk of the President.

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Source: Sallie Mae Buyout May Fail Due to Pending Legislation