Posts Tagged ‘Sallie Mae’
College Lending Under scrutiny
Sallie Mae and other CEO’s from lending institutions across the U.S. seem to think there’s a big problem with the collegiate loan industry, in part because they can’t bundle their loans into securities to sell to institutional investors. Why? Demand has dried up for these type of investments due to investor fear and a downward trend in investor liquidity. On Wednesday, Citigroup Inc. said it will temporarily stop issuing loans to students at schools where profits have not been satisfactory.
The fact is, no one will know just how bad the situation is until data will become available in June or July as mentioned in my April 17th post.
Help on the Way?
Congressional leaders and the Bush administration are in a bit of a bind when it comes to helping free up more dollars to lend to College students. Why? It would mean a bail out for the lending institutions who created the mess in the first place. Does this sound familiar? (Search Mortgage lending companies and credit crunch in Google )
What to Look for in the Months Ahead
Some areas of interest in the coming months.
College Enrollment/Attendance Statistics (Has student lending affected enrollment rates)
Student Loan Company Earnings Reports (Are publically traded companies earnings reflected upon the lack of money available?)
College Tuition adjustment (If enrollment starts to cool down, will institutions lower tuition rates?)
Employment Data (If the employment rate starts increasing, that will mean less money for the larger more prestigious Colleges)