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Citigroup which has an 80% snshare in the Student Loan Corp. said it will suspend lending at certain schools and withdraw from the Federal Consolidation Loan market, becoming the latest company to pull in its horns regarding student lending.

Citigroup Inc., blamed higher funding costs caused by the "continued disruption in the capital markets," which has cut the profitability on student loans, and new federal law that cut subsidies and will lower profit margins.

In a toss off statement that was calculated to appease, a Citigroup spokeperson said, "While a number of lenders have exited the industry altogether, SLC continues to originate Federal Stafford Loans and Federal PLUS Loans as well as private loans." On the other hand, as of May 1, the firm will pull out of the loan-consolidation market and suspend lending where loans with lower balances and shorter interest-earning periods result in unsatisfactory financial returns.

Student Loan Corp. offering no time table for a return to the market, as before, said it "expects these changes to be temporary and will evaluate returning to these schools and offering federal consolidation loans as student loan market conditions improve."

SLM Corp., the nation's largest student lender, (Sallie Mae) said last week that it would stop offering federal consolidation loans, under which borrowers combine loans into a fixed-rate loan.

The credit crunch and recent cuts in federal subsidies have forced a number of student lenders to stop making federal student loans and tighten their credit standards on private student loans. But consolidation loans have been among the hardest hit because they're the least profitable loans for lenders, most of whom are now losing money with each consolidation loan they make.

In total, about 50 providers of federally guaranteed loans, as well as nearly 20 private student-loan firms, have pulled out of the market.