WASHINGTON — SLM Corp., the nation's largest student lender that is soon to become a private company, said Tuesday its first-quarter profit shrank 24 percent as more students missed payments on loans.

The earnings decline at SLM, commonly known as Sallie Mae, reflects the higher risk of student loans not guaranteed by the federal government. Those private loans, which constitute about 16 percent of Sallie Mae's nearly $150 billion portfolio, do not have their interest rates capped as many government-backed loans do.

Many more students defaulted in the January-March period, the company said. Reston, Va.-based Sallie Mae wrote off 3.4 percent of the private debt on its books. That was significantly widened from 1.3 percent in the year-earlier quarter.

"There's always that risk with private loans," said Steve Burd, senior research fellow in the education policy program at the New America Foundation, a think tank that is critical of how student lending operates in the country...

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