Student loan market in trouble
Sallie Mae, the nation’s top student lender, is not immune to credit woes, SanDiego.com reports. With its interest rate capped at 6.8% and with many of its competitors scaling back their student loan activity or withdrawing completely from the market, Sallie Mae is looking for help after reporting a first quarter loss of $104 million. It’s particularly critical now since this is the time when many students apply for loans for the fall semester.
Sallie Mae would like the U.S. Treasury Department to aid the stricken student-loan market by purchasing securities backed by student loans. The U.S. House is due to vote Thursday on legislation that would give the Education Department temporary authority to buy loans from student lenders to ensure their access to capital.
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