While this article is centered on one particular company, it does contain a whole lot of 'disturbing' tidbits. Among them ...
(snip)"Private student lender Sallie Mae (NYSE:SLM - News) has warned that it would stop making subprime loans.
"Nobody has acknowledged it's been a real issue for enrollment. But that is what everybody is concerned about," Urdan said."(snip)
(snip)"Just 3% of Strayer's revenue comes from private loans for tuition. A mere 0.25% are in the subprime category most at risk.
Contrast that to peers with the biggest private-loan exposure: ITT Educational's (NYSE:ESI - News) 30%, Career Education's (NasdaqGS:CECO - News)18% and Corinthian College's (NasdaqGS:COCO - News) 13%.
"They've taken it on the nose in terms of stock prices," said analyst Trace Urdan of Signal Hill of these three for-profit colleges."(snip)
It would appear that the same worries about subprime mortgage defaults, credit card defaults, auto loan defaults etc. has now crossed over into the arena of student loans. The same result is likely as well ... i.e. future loan approvals will require a high credit score, preferably with the backing of a gov't agency guarantee.




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