Sallie Mae, the biggest provider of student loans in the nation, has sued the group of buyers that had agreed to buy the company for $25 billion.

Since that April agreement, however, the buyout group, which includes the private equity firm J.C. Flowers & Co., Bank of America, and J.P. Morgan Chase, has argued that new legislation that cuts subsidies to student lenders has fundamentally lowered the value of the business. The buyers contend that the price should be renegotiated as a result of that "material adverse effect."

Sallie Mae, formally known as SLM, has said that potential impact of the  legislation had already been disclosed.

 "As a matter of logic and clear contractual language, legislation that is only marginally worse for Sallie Mae than the disclosed proposals" cannot be a material adverse effect, the company said in the  lawsuit, according to the New York Times. "The differential effect of enacted legislation as compared to the disclosed proposals must itself be material to Sallie Mae's financial condition, business or results of operations."

Sallie Mae's lawsuit, filed in the Chancery Court of Delaware, seeks a declaration that Sallie Mae may terminate the merger agreement and collect the $900 million break-up fee, that the buyer group has repudiated the merger agreement, and that no material adverse effect has occurred.

Albert L. Lord, Sallie Mae's chairman, said in a statement: "We regret bringing this suit. Sallie Mae has honored its obligations under the merger agreement. We ask only that the buyer group do the same."

The buyers group offered last week to pay $50 per share in cash and warrants that could under certain conditions result in a payout of $10, which would bring the offer back to the original price of $60 per share.  That offer was set to expire today.