May 30 2013
NYTimes: Sallie Mae Will Split Old Loans From New
The nation’s largest private student lender, Sallie Mae, is cleaving itself into two companies — a move that will create a new home for more than $100 billion of student loans amid broad concerns from federal authorities and consumer advocates that graduates hobbled by debt are increasingly falling behind on their payments.
The overhaul by Sallie Mae is playing out as college students, facing persistent unemployment and a sluggish economy, are defaulting on their loan payments at a rate of 13.4 percent, a level not seen for more than a decade, according to the latest statistics from the Department of Education. As student loan debt grows — it has outpaced total credit card debt, reaching more than $1 trillion — more loans are going to the riskiest borrowers, according to a January report by TransUnion Corporation, which provides credit information to lenders.
Federal authorities, including the Consumer Financial Protection Bureau, are worried that lenders have rekindled their dangerous infatuation with subprime borrowers, leading some to ignore lending standards and to court borrowers who cannot repay the loans.
Earlier this month, Richard Cordray, director of the consumer bureau, compared the student loan market to the market for subprime mortgages that collapsed, leading to a precipitous drop in housing prices, during the financial crisis.
“We learned a hard lesson in the wake of the mortgage meltdown,” Mr. Cordray said. “We cannot just sit by and watch this happen to people again.”
Sallie Mae, which is formally the SLM Corporation, announced the split on Wednesday. It will create dual companies and hasten the retirement of the lender’s longtime chief executive, Al Lord. One company, the education-loan management business, headed by John F. Remondi, Sallie Mae’s chief operating officer, will contain about 95 percent of the student loan giant’s assets, including $118.1 billion in federal loans and $31.6 billion of private loans. The other, fashioned as a consumer-banking business, will make student loans to fill a seemingly insatiable demand from borrowers, stoked by skyrocketing college costs.
Click here for the full story.
5 Responses to “NYTimes: Sallie Mae Will Split Old Loans From New”
Wonderful site. Plenty of helpful information here. I’m sending it to several pals ans additionally sharing in delicious. And naturally, thanks on your sweat!
I have to show some thanks to you for bailing me out of this challenge. As a result of checking through the online world and seeing tips which were not helpful, I was thinking my entire life was over. Existing devoid of the approaches to the problems you have sorted out through your main article is a serious case, and the ones which may have badly damaged my entire career if I had not discovered your blog. Your own understanding and kindness in controlling almost everything was invaluable. I am not sure what I would have done if I had not come upon such a solution like this. I can at this time relish my future. Thanks so much for this reliable and results-oriented guide. I won’t be reluctant to recommend your site to any person who ought to have recommendations about this area.
The processor or CPU may be the brains with the laptop or computer – it does most with the calculations your game titles require to operate (with the video clip card carrying out most with the graphics function). With it staying these kinds of an essential component, you would instinctually go for the fastest – and most high priced – processor you can discover, but there can be a far much better substitute to blowing funds on anything that will likely be obsolete in a yr: finding a processor that will play tomorrow’s online games at a minimal amount is the sweet spot for any gaming private computer.
I believe you’ve got mentioned some really intriguing points , regards for the post.
This is a very good topic to speak about. Generally when I find stuff like this I stumble it. This write-up probably won’t do effectively with that crowd. I will probably be certain to submit something else though.