Thread: How Credit Crunch Affects Sallie Mae

Sallie Mae CFO says size matters in tough times | Reuters

Because of the company's size -- it manages nearly $172 billion in loans -- the regulation "works better for us than probably anyone else" he added.
The Department of Education funding is for government guaranteed loans. Sallie Mae also makes student loans that are not government guaranteed, known as "private" loans, which tend to be more profitable.
"Even if (Sallie Mae) couldn't make another private credit loan because of credit market conditions, this company has a viable business model that's profitable and sustainable," he said.

So Sallie Mae looks stable in this financial mess because of the fact it's backed by gov't and it's not involved in the subprime mortgages that embroiled Fannie and Freddie. But is there any possibility we could see a change in the way student loans are handed out in the near future?

Yes, it can get worse. More co-signers, etc.

Originally Posted by djnitin

Sallie Mae CFO says size matters in tough times | Reuters





So Sallie Mae looks stable in this financial mess because of the fact it's backed by gov't and it's not involved in the subprime mortgages that embroiled Fannie and Freddie. But is there any possibility we could see a change in the way student loans are handed out in the near future?

prob not more cosigners, prob higher requirements.
the loan problems can't really get any worse now that most private loans have ended.

O will increase unsub/sub loan amounts as he has detailed. good stuff there.

Higher requirements is a given in the formula.

Nothing wrong with increasing the unsub/sub loan amount, since ultimately it will cover the increase in tuition, sort of a status quo in practical terms.

Originally Posted by AmericanIMG

prob not more cosigners, prob higher requirements.
the loan problems can't really get any worse now that most private loans have ended.

O will increase unsub/sub loan amounts as he has detailed. good stuff there.

Private loans will become more difficult to get but the government solved this situation by introducing GradPlus which is actually better than a private loan.
The top 3 Caribbean schools, medical schools in the UK, Ireland, and Australia all qualify for Stafford funding and hence qualify for GradPlus which pays for the entire cost of attendance, so no real worries for folks attending the above medical schools.

Cosigners will probably be required for Private loans but its doubtful that they will be there for Government loan programs like Plus and Stafford.