the Trade-Radar + TradingStockAlerts blog

Earlier in the week I wrote a post listing some of the recent events taking place in the student loan industry. The title of the post, " Student loan industry imploding? ", gives a flavor of the point of view of the post. Since then, we have heard that Bank of America (BAC) will stop making private student loans and Citigroup's Student Loan Corp. (STU) has announced they are discontinuing federal loan consolidations and will scale back lending to students at schools where profitability is lacking. Finally, Sallie Mae (SLM) reported earnings and held a conference call today. The company lost $104 million in its first quarter but somehow expects to stay on track for its full year target. Problems faced by the company include the fact that financial and credit market turmoil have impacted Sallie's ability to obtains funds and forced the company to mark down various securities and derivatives. What is unprecedented is Sallie's contention that they are losing money on ...

Here is a list of headlines coming from the student loan industry these days. This is just over the last six weeks or so but serves to provide a flavor for the turmoil students and especially lenders are going through. Click on the story titles for the details. Big US student loan guarantor files for bankruptcy Student Loan Stir Hits First Marblehead TERI, a guarantor that worked closely with First Marblehead, filed for bankruptcy. It has more than $1 billion of assets, and between $500,000,001 and $1 billion of liabilities. Ouch... Sallie suspends combined federal loans Sallie has decided to stop doing loan consolidations, even for federal loans, saying the business has become unprofitable. The credit crunch comes to former students now in repay... Lenders Drop Out of Student Loan Market Forty-six student lenders have stopped making federally guaranteed student loans, either temporarily or permanently. Recently enacted legislation that reduces profits, difficulties in ...