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By THE ASSOCIATED PRESS

Filed at 3:47 p.m. ET

WASHINGTON (AP) -- Sallie Mae, the nation's largest provider of student loans, disclosed an inquiry into its accounting by the Securities and Exchange Commission.

The company said Friday the inquiry involves ``year-end accounting entries'' made by employees at a recently acquired subsidiary.

``While the amounts in question appear to be less than $100,000, the company and its audit committee take such matters very seriously and are taking all appropriate actions,'' the company statement said.

Sallie Mae spokesman Tom Joyce gave no further details, but said the subsidiary in question is not part of Sallie Mae's core student-loan business.

SEC spokesmen would not comment.

Sallie Mae shares rose 52 cents to $38.39 in afternoon trading on the New York Stock Exchange.

Reston, Va.-based Sallie Mae, formally named SLM Corp., was a federally sponsored company until 1997, when a majority of shareholders voted to sever its ties to the government. The Fortune 500 company still buys student loans from banks, bundling them into securities for sale on Wall Street. Sallie Mae now also competes with banks by making most of its federally guaranteed loans directly to students.

Sallie Mae has some $52 billion in assets and more than 7,000 employees nationwide. It also makes loans for study by adults, runs loan-collection agencies and sells technical products and services to colleges and universities.

In May 1999, it bought New England-based Nellie Mae, the seventh-largest holder of federally backed student loans.

Other subsidiaries include Hemar Insurance Corp. of America, Education Debt Services Inc., Pioneer Credit Recovery Inc., TrueCareers Inc. and wiredscholar.com.

Sallie Mae recently reported that its fourth-quarter earnings fell 14 percent, to $264.4 million or 57 cents a share from $306 million or 64 cents a share in the final quarter of 2002.

Attention has been drawn to the accounting troubles of Freddie Mac, a government-sponsored company that is the second-largest U.S. buyer of home mortgages. Freddie Mac misstated by $5 billion its earnings for 2000-2002, bringing the ouster of four top executives since June and investigations by the SEC and the Justice Department. Federal regulators fined the company $125 million in December.