NEW YORK (Reuters) -- Sallie Mae, the largest U.S. student loan company, has agreed to be bought by two private-investment funds along with JPMorgan Chase and Bank of America for $25 billion, the Wall Street Journal reported on its Web site on Monday.

The move comes on the heels of a settlement between Sallie Mae and New York Attorney General Andrew Cuomo for $2 million in which Sallie Mae promised to change its lending practices.

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JC Flowers & Co. and Friedman Fleischer & Lowe plan to take a 50.2 percent stake in Sallie Mae, the paper reported, citing unnamed sources, while JPMorgan (Charts) and Bank of America (Charts) each would take 24.9 percent stakes.

The group plans to pay $60 per share for the student lender, also known as SLM (up $6.01 to $46.76, Charts), the Journal said.

Shares of student lenders have been under pressure since November, when Democrats won enough seats in Congress to control both the House of Representatives and the Senate.

Investors are concerned that Democrats will find ways to reduce the role of private lenders in the student loan market.

None of the companies or investment firms were immediately available for comment.

Sallie Mae shares closed on Friday at $46.76, up $6.01, or nearly 15 percent after the New York Times first reported that talks were underway. The offer price is almost a 50 percent premium to the $40.75 that the stock closed at on Thursday.

At $60 per share, the investors are paying more than 18 times anticipated 2007 earnings of $3.67 per share, according to Reuters Estimates.

The purchase will be funded with $16.5 billion in debt and $8.5 billion in equity, the Journal said.

Attorneys General from states including New York, California, and Connecticut are meanwhile looking into the extent to which student loan companies are offering kickbacks to universities and their financial aid employees for steering business.

Sallie Mae agreed last week to change business practices including paying financial aid officers for appearing on advisory boards.

Senator Edward Kennedy, a Democrat, has introduced legislation that would threaten lenders including Sallie Mae by rewarding colleges for steering students into loans made directly by the government.

Sallie Mae was created in 1972 as a quasi-governmental company known as a "government sponsored entity." The company began cutting its direct government ties in 1997, a process completed in 2004.

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