Sallie Mae (SLM) can’t stop sinking. The student lender slashed its full-year profit outlook Wednesday and shook up its sales team, citing rising funding costs and increased loan reserves. Sallie also tried to revive a buyout deal, to no effect. The firm said it has offered “to consider an alternative transaction” with the private equity-led group that signed up in the spring to buy Sallie before backing away as markets swooned. The group, led by J.C. Flowers, rejected Sallie’s offer, the company said.

Sallie was all set to be purchased by the Flowers group for $60 a share before the credit markets soured this past summer. After some wrangling, Flowers and his backers at Bank of America (BAC) and J.P. Morgan (JPM) then offered to buy Sallie for $50 a share, plus some stock warrants. Sallie rejected that too, righteously declaring it would sue the buyers to enforce the terms of the $60-a-share deal. Since then, however, it has become clear that this summer’s credit crunch is no passing fancy, and Sallie’s shares have plunged. They fetched less than $30 after Wednesday’s announcement, which nonetheless insisted that “underlying business drivers for the company are strong and executive management is strategically repositioning certain aspects of the business to allow for maximum growth and earnings opportunities.” By now, shareholders are surely considering “repositioning” Sallie chief C.E Andrews and chairman Albert Lord.

Problems in the credit market seem to have infected an institutional money market fund run by Bank of America’s (BAC) Columbia Management. Money market observer Crane Data reports that Columbia Funds Strategic Cash has halted redemptions after the fund’s assets fell to $33 billion from $40 billion after a run of redemptions. Crane says the fund in question is an enhanced cash pool available to only the largest qualified institutional investors. A call to Columbia wasn’t immediately returned.

At Naked Capitalism, Yves Smith points out that no investors are known to have lost money, though he notes that BofA previously pumped $300 million into the fund. A report about the redemption halt on CNBC took Bank of America stock down a bit, though the banks and brokerages are still rising on the heels of Monday’s capital infusions at UBS (UBS) and MBIA (MBI).