Getting back to blogging after a brief hiatus. Here are a few stories that seemed noteworthy:
- Sallie Mae shares rose almost 20% yesterday (Monday) to $7.93 after upbeat comments from CNBC analyst Jim Cramer and William Blair analyst, David Long. Among other items, they cited the following as potential positive developments for the company:
- "Meanwhile, William Blair & Co analyst David Long wrote that even if the Obama administration cut subsidies to student lenders, Sallie Mae would still likely be able to make and service loans for the Department of Education."
- "Cramer, though, said that even if the FFELP disappeared, the government could still use the company to service loans and collect bad debts. These are already both huge businesses for Sallie Mae, and they're the best at it, far better than the government could ever be, so they'll save the taxpayer money," Cramer said. "Reports of Sallie Mae's death are premature."
- SLA comment: The Department of Education should be announcing the winning bids any day now for the contract to service FFELP loans sold to the Department. As of this morning at 10:30am ET, there was no announcement on the specific webpage dedicated to this loan servicing opportunity.
- Last Thursday, Student Loan Corporation announced their participation in the Department of Education conduit financing vehicle, through this 8-K filing:
On June 4, 2009, The Student Loan Corporation (the Company) received its initial funding from the placement of Federal Family Education Loan (FFEL) Program loans under the U.S. Department of Education sponsored conduit, Straight-A Funding, LLC (the Conduit). The funding transaction settled today in the amount of $3.8 billion. Approximately $7 billion of the Company's FFEL Program loan portfolio remains eligible for future funding under the Conduit.
The Conduit provides additional liquidity support to the Company via the creation of a multi-seller asset-backed commercial paper conduit that purchases Stafford/PLUS loans first disbursed on or after October 1, 2003 and before July 1, 2009. Purchases of loans from lenders are funded indirectly through the sale of asset-backed commercial paper to private investors. The Conduit is supported by a liquidity facility provided by the Federal Financing Bank and an agreement with the U.S. Department of Education to purchase loans from the Conduit in order to allow the Conduit to repay funds borrowed from the Federal Financing Bank, to the extent required. The Company expects this facility to provide an attractively priced alternative source of funding, which will be largely based on pricing the Conduit receives from the issuance of asset-backed commercial paper. The initial term of this funding is five years.
- A Press release from Stanford Business School announced the relationship with Star One Credit Union to provide private loans to their graduate students. I had posted on this new development last week as another example of credit unions increasing their presence in the private loan marketplace.
- Wall Street Journal presents best online tools for personal finance, which might be useful to share with college students and graduating seniors. These include tools that help you accomplish the following tasks:
- Budgeting your money
- Create a financial plan
- Tracking investments
- Checking for fraud
- Keeping track of credit
- Managing loans
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