SLM Corp., the largest American student-loan provider, said the group planning to buy the company may scuttle the $25 billion deal because of congressional plans to cut lender subsidies.

The buyers, led by private-equity firm J.C. Flowers & Co., warned the company that the pending legislation “could result in a failure” to close the purchase, Reston, Va.-based SLM said yesterday in a statement. Shares of the company, known as Sallie Mae, fell 9.8%, the most in 14 years.

“Sallie Mae strongly disagrees with this assertion,” the company said in the statement, without elaborating. Spokesman Tom Joyce declined further comment. The takeover agreement allows the buyers to withdraw if Congress cuts federal subsidies for education lenders by more than the $16 billion requested by President Bush in his February budget. The House today approved a measure that would lower the subsidies by $19 billion over five years. Mr. Bush has threatened to veto the measure. The Senate is expected to vote on a similar measure this month, though it has proposed fewer cuts.

Flowers, together with Friedman Fleischer & Lowe LLC, JPMorgan Chase & Co., and Bank of America Corp., agreed April 16 to pay $60 a share for SLM, a 28% premium. Either side would receive $900 million if the other walks away from the transaction. Sallie Mae said yesterday it plans to proceed with the acquisition. Sallie Mae shares fell $5.65 to $52.15 at 4 p.m. in New York Stock Exchange composite trading. They were the second worst performers on the Standard & Poor’s 500 Index after Compuware Corp.