Student Lending Analytics Blog

SLA Student Loan Index Up 83% Since Late February

The SLA Student Loan Index, an equally weighted index of the four publicly held "pure-play" student loan companies has risen 83% since late February, when I last ran the calculations on the index.   Note that even with that strong performance over the last four months, two of the company stocks (STU and NNI) are below water for the year-to-date while Sallie Mae is up a more modest 15.4%.  The three year returns remain abysmal, with the best performer, NNI, only losing 66%.  The index bottomed in early March over investor fears about the budget blueprint put forward by the Obama Administration in late February to eliminate the FFEL program by shifting all federal loan volume into the Direct Loan program.   

So, what has happened since early March to improve market sentiment about the sector:

The SLA Student Loan Index, an equally weighted index of the four publicly held "pure-play" student loan companies has risen 83% since late February, when I last ran the calculations on the index.   Note that even with that strong performance over the last four months, two of the company stocks (STU and NNI) are below water for the year-to-date while Sallie Mae is up a more modest 15.4%.  The three year returns remain abysmal, with the best performer, NNI, only losing 66%.  The index bottomed in early March over investor fears about the budget blueprint put forward by the Obama Administration in late February to eliminate the FFEL program by shifting all federal loan volume into the Direct Loan program.   

So, what has happened since early March to improve market sentiment about the sector:

The SLA Student Loan Index, an equally weighted index of the four publicly held "pure-play" student loan companies has risen 83% since late February, when I last ran the calculations on the index.   Note that even with that strong performance over the last four months, two of the company stocks (STU and NNI) are below water for the year-to-date while Sallie Mae is up a more modest 15.4%.  The three year returns remain abysmal, with the best performer, NNI, only losing 66%.  The index bottomed in early March over investor fears about the budget blueprint put forward by the Obama Administration in late February to eliminate the FFEL program by shifting all federal loan volume into the Direct Loan program.   

So, what has happened since early March to improve market sentiment about the sector:

SLA Student Loan Index Drops 47% in February Due to Obama Budget Proposal

The SLA Student Loan Index, an equally weighted index of the four publicly held "pure-play" student loan companies dropped 47% in February 2009 driven by sharp share price declines at Sallie Mae which suffered a 60% decline and Nelnet which saw their shares drop 63%.  As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI) and First Marblehead (FMD).  My Rich Uncle (UNCL), which recently filed a Chapter 7 bankruptcy was taken out of the index in February.  

The main driver of the sharp decline in the SLA Student Loan index was the budget blueprint put forward by the Obama Administration in late February which called for the elimination of the Federal Family Education Loan (FFEL) program. 

• Here are the changes in the share prices for each of the components in the SLA Student Loan Index: 

	FMD	NNI	SLM	STU
February '09	-17.4%	-63.1%	-59.8%	-17.5%
YTD	-26.4%	-64.4%	-48.3%	-5.6%
3 Months	-31.7%	-61.2%	-50.1%	2.2%
1 Year	-92.1%	-53.2%	-76.5%	-62.4%
3 Year	-95.9%	-87.4%	-91.6%	-79.8%

The SLA Student Loan Index, an equally weighted index of the four publicly held "pure-play" student loan companies dropped 47% in February 2009 driven by sharp share price declines at Sallie Mae which suffered a 60% decline and Nelnet which saw their shares drop 63%.  As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI) and First Marblehead (FMD).  My Rich Uncle (UNCL), which recently filed a Chapter 7 bankruptcy was taken out of the index in February.  

The main driver of the sharp decline in the SLA Student Loan index was the budget blueprint put forward by the Obama Administration in late February which called for the elimination of the Federal Family Education Loan (FFEL) program. 

The SLA Student Loan Index, an equally weighted index of the four publicly held "pure-play" student loan companies dropped 47% in February 2009 driven by sharp share price declines at Sallie Mae which suffered a 60% decline and Nelnet which saw their shares drop 63%.  As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI) and First Marblehead (FMD).  My Rich Uncle (UNCL), which recently filed a Chapter 7 bankruptcy was taken out of the index in February.  

The main driver of the sharp decline in the SLA Student Loan index was the budget blueprint put forward by the Obama Administration in late February which called for the elimination of the Federal Family Education Loan (FFEL) program. 

SLA Student Loan Index Rises 6.5% in January To 28.6

The SLA Student Loan Index, an equally weighted index of the five publicly held "pure-play" student loan companies rose 6.5% in January 2009 driven by strong share price gains at Sallie Mae (up 28.7%) and Student Loan Corporation (up 14.5%).  As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI), First Marblehead (FMD) and MRU Holdings (UNCL).

The SLA Student Loan Index, an equally weighted index of the five publicly held "pure-play" student loan companies rose 6.5% in January 2009 driven by strong share price gains at Sallie Mae (up 28.7%) and Student Loan Corporation (up 14.5%).  As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI), First Marblehead (FMD) and MRU Holdings (UNCL).

SLA Student Loan Index Drops 24.7% in September to 39.3

September 2008 is now one for the record books (good riddance as they say!).  It will be remembered as the month when the U.S. financial markets entered their "creative destruction" phase.  Let's see:  Fannie and Freddie were nationalized, Lehman entered bankruptcy, Merrill Lynch was acquired by Bank of America, Morgan Stanley and Goldman Sachs became bank holding companies, Wachovia was acquired by Citibank and a $700 billion bailout plan was turned back by the House (although it appears it may pass the second time around).  Am I missing anything?  Yes, a few student lenders discontinued their private loan programs also (Key Bank, Wachovia, CampusDoor).  Through all this turmoil, the SLA Student Loan Index, an equally weighted index of the five publicly held "pure-play" student loan companies fell 24.7% in September to 39.3.  

As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI), First Marblehead (FMD) and MRU Holdings (UNCL)

Here are the highlights of how the index has recently performed:

September 2008 is now one for the record books (good riddance as they say!).  It will be remembered as the month when the U.S. financial markets entered their "creative destruction" phase.  Let's see:  Fannie and Freddie were nationalized, Lehman entered bankruptcy, Merrill Lynch was acquired by Bank of America, Morgan Stanley and Goldman Sachs became bank holding companies, Wachovia was acquired by Citibank and a $700 billion bailout plan was turned back by the House (although it appears it may pass the second time around).  Am I missing anything?  Yes, a few student lenders discontinued their private loan programs also (Key Bank, Wachovia, CampusDoor).  Through all this turmoil, the SLA Student Loan Index, an equally weighted index of the five publicly held "pure-play" student loan companies fell 24.7% in September to 39.3.  

As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI), First Marblehead (FMD) and MRU Holdings (UNCL)

Here are the highlights of how the index has recently performed:

Student Lenders Not Immune to Crisis of Confidence in Financials

For those wondering how the student lenders performed on a day when the Dow Jones Industrials dropped 500 points (a 4.4% drop), the answer is not so marvelously.   Keep in mind, as you look at the figures below that the financial sector of the S&P500 overall fell 9.74% as investors fled this sector of the market. 

Here is how the student loan industry fared today, 9/15/08:

Company	9/15 Price Change
Nelnet	Down 5.68%
Student Loan Corporation	Down 9.90%
First Marblehead	Down 14.15%
Sallie Mae	Down 14.48%
My Rich Uncle	Down 35.71%

SLA Student Loan Index Rises 13% in August to 52.2

So, what is Mr. Market telling us about the outlook for student loan companies?  The SLA Student Loan Index, an equally weighted index of the five publicly held "pure-play" student loan companies rose 13% in August driven by strong stock price gains at First Marblehead and Nelnet.   As a quick reminder, this index was launched in early July 2008 to provide a barometer of investor sentiment about the industry.  The components of this index are Sallie Mae (SLM), Student Loan Corporation (STU), Nelnet (NNI), First Marblehead (FMD) and MRU Holdings (UNCL)

While these five companies vary greatly based on their focus (First Marblehead is focused on securitizations of private loans while Sallie Mae is a vertically integrated provider of FFEL and private loans) and their size (Sallie Mae has a market cap. over $9 billion while MRU is just north of $70 million), this index provides some insights on both the individual prospects of companies and also the overall direction of the industry.

Here is the highlights of how the index has recently performed:

New SLA Student Loan Index Measures Investor Sentiment

As a barometer of investor sentiment about the prospects of the student loan industry, the share prices of the publicly held "pure-play" student loan companies would appear to be a good proxy.  Today, SLA is pleased to announce our SLA Student Loan Index.  This is an equally-weighted index which will measure the share prices of the pure-play student loan companies.  The intent of this index will be to provide insights into the short and long-term prospects of the student loan marketplace.  The components of this index will be:

• Sallie Mae (SLM)