Shares of SLM Corp, the parent of student lender Sallie Mae, plunged to $21.32 on September 22, wiping out roughly $700 million in market value after at least one investor-focused law firm announced an investigation into potential corporate wrongdoing by the company and certain executives. The probe, disclosed over the weekend, targets investors who purchased shares before July 25, 2025 — a window that suggests the alleged issues may stretch back well over a year. Sallie Mae's 15% Plunge Revives a Festering Legal Crisis — Can the Student Lender Outrun Its Delinquency Demons?
Shares of SLM Corp cratered 15% to $21.32 on September 22, erasing roughly $700 million in market value after Bronstein, Gewirtz & Grossman LLC renewed its investigation into alleged corporate wrongdoing at the nation's largest private student lender. The firm issued its latest notice on September 20, encouraging investors to connect regarding the probe. The sell-off is the sharpest single-day decline for the stock in months and rekindles investor anxiety over a legal saga that began last summer.
The Lawsuit Traces Back to Hidden Loan Troubles. The complaint alleges that between July 25, 2025, and August 14, 2025, Sallie Mae failed to disclose a significant increase in early-stage delinquencies — borrowers falling behind on payments — and overstated the effectiveness of its programs designed to help struggling borrowers stay current.
TD Cowen flagged that July 2025 delinquencies rose 49 basis points month-over-month, far worse than the normal seasonal 10-basis-point uptick, driven by a 45-basis-point jump in early-stage delinquencies — directly contradicting CFO Peter Graham's assurance that rates were "following the normal seasonal trends."
After that report, SLM stock initially fell roughly 8%.
Multiple Law Firms Are Circling, Raising Settlement Risk. This is not a single ambulance-chaser scenario. A class-action lawsuit has already been filed , with the case — Zappia v. SLM Corporation — proceeding in U.S. District Court in New Jersey, charging top executives with violations of the Securities Exchange Act of 1934. At least four separate firms have solicited plaintiffs. Each additional investigation amplifies reputational drag and potential payout exposure.
The Business Picture Muddies the Defense. Sallie Mae itself acknowledged that its strategic shift to selling newly originated loans would lead to "modest increases in the NCO rate, delinquency rate, and reserve rate" due to portfolio-mix changes. That nuance could complicate its legal defense: if management knew structural factors were pushing delinquency metrics higher, the line between "normal trends" and material omission narrows.
Valuation Sits in Limbo Ahead of October Earnings. The company's next earnings report is confirmed for October 22.
Analysts still carry an average "Buy" rating with a $28.55 price target — now 34% above today's price, a gap wide enough to signal either deep value or a consensus that hasn't caught up with legal risk. Q2 results already disappointed, with EPS of $0.29 missing estimates of $0.46 and revenue of $275 million falling 21% short of forecasts. Investors now face a lender fighting both deteriorating credit metrics and a courtroom.