Investment firm buys Sallie Mae stake

Washington -- Mutual fund manager Dodge & Cox has acquired a 10.5 percent stake in troubled student loan company Sallie Mae after the lender won relief from U.S. lawmakers.

San Francisco-based Dodge & Cox revealed it made the stock buy in a disclosure filing made with the U.S. Securities Exchange Commission, according to a report in the Washington Post, which said the investment firm did not indicate it had any plans to pursue a takeover of Sallie Mae.

Dodge & Cox put down its money after Sallie Mae's share price had been battered by turmoil in the credit markets and cuts in student loan subsidies from the federal government.

The nation's largest student lender got some good news last week, however, when President Bush signed legislation allowing the U.S. Department of Education to pump cash into the firm by buying some of its loan portfolio. Analysts, however, were unsure if that move will ultimately enhance Sallie Mae's profitability.

Copyright 2008 by United Press International.