<p>
[quote]
Anthony Norton, a junior at the University of Massachusetts in Boston, just learned a tough lesson in economics:</p>
<p>The credit market crisis is spreading to student loans.</p>
<p>Norton thought he was set when he deposited a $16,000 student-loan check to pay for summer classes and the fall semester. But when he started to pay bills for classes, rent, and other expenses last week, his checks bounced.
[/quote]
Credit</a> crisis hits student borrowers - The Boston Globe</p>
<p>Wow, that poor kid. Can you imagine? Where will this all end up? I worry for the future of America and hope for change very soon.</p>
<p>Where it all end up, a massive financial debacle for both current students and those who made the mistake of borrowing for their education. The large players in the loan industry are backing away, but not necessarily because they have taken major losses which cannot be sustained. Keep in mind that in most cases their 'investment' is backed by public money, so in no real terms are they taking big losses. The unfortunate reality is that the way this system has been organized these large companies can make more money by threatening withdrawal from the SL 'providers' market, at which point their cronies in Congress will hand them a few more billions. And some of these companies are currently filing for bankruptcy, not because they are actually insolvent, but because it allows them to reorganize and essentially redirect questionable lending practices away from public view. The sale of SM to another lending entity was a similar trick, they did that just as clamor for investigation is rising.
Where it will ultimately lead is the threat tactics, and unregulated financial abuses of the SL industries have caused a massive financial bubble which has begin to explode. But the companies involved will simply move assets and lobby for government protections. Students and former students however will get shafted, by either having school funding cut, or by having usury level interests and fees levied on loans they do hold. Essentially some kleptocrats have finally broken the backs of the population on which they were preying. And that's the 'credit crunch' that's actually happening. But congressional action is being taken the wrong direction.
It's all in the interest of saving the student loan industry...which never should have been allowed to even form, let alone hold the amount of power it currently exerts. But money, even that obtained by subverting public policy, buys favor. And if one thinks the big players in this industry are actually in a severe straight, reading into such as the Chronicle and other sources would be appropriate. Well keep in mind that Education Secretary Spellings let NelNet keep almost 280 million of money which they had over billed the US government. And that's just one company....there are more...</p>
<p>And exactly how, given this manner of publically funded profits, can these companies claim a credit crunch. Could it be they are looking for yet more 'gifts' from the government, or perhaps they're beginning to realize that the backs of student borrowers have been broken by unreasonable and impossible fees, interest rates and etc? Christ I've seen several of these refinancing agreements which add up to 30% interest on a loan...</p>
<p>Some information as to how tragically low the credit/profit ratio is for the largest companies in this field...</p>
<p>Lord recently attempted to PURCHASE A MAJOR LEAGUE BASEBALL TEAM with wealth he has extracted from defaulted borrowers (his compensation since 1999 was $225 million, not including appreciation of his stock). Collectively, Albert Lord and current CEO Tim Fitzpatrick have taken about $367 million from the company since 1999. Since 1997, Sallie Mae has registered $3.6 Billion in stock for offering to employees. Sallie Mae CEO's regularly top the list of highest paid executives in Washington D.C.
Sallie Mae (SLM Corporation) is the largest education finance company in the U.S. "The company was originally established as the Student Loan Marketing Association, a government-sponsored enterprise (GSE), but began to privatize in 1997. The GSE was phased out in the first quarter of 2005, and Sallie Mae is fully privatized," it states on its website. [1]</p>
<p>Sallie Mae is the parent company of Nellie Mae, which also funds student loans.</p>
<p>In 2006, Sallie Mae revenue was US$9.1 billion with profits of US$1.1 billion. Top competitors are Bank of America, KeyCorp, and Student Loan Corporation.[1] Based in Reston, Virginia, the company was founded in 1972.[2]</p>
<p>Contents [hide]
1 Political contributions
2 Lobbying
3 Personnel
4 Contact details
5 Resources
5.1 Related SourceWatch articles
5.2 References
5.3 External articles </p>
<p>[edit]Political contributions
Sallie Mae gave $572,000 to federal candidates in the 2006 election through its political action committee - 52% to Democrats and 48% to Republicans. [3]</p>
<p>[edit]Lobbying
Sallie Mae (SLM Corporation) spent $2,758,700 for lobbying in the first half of 2007. Some of the lobbying firms used were Clark & Weinstock, Patton Boggs, Van Scoyoc Associates, Inc., and the individual Richard Hohlt. [4]</p>
<p>[edit]Personnel
Key people and pay: [5]</p>
<p>Albert L. Lord, Chairman and Chief Executive Officer, $3,300,000 (2005)[6]
Charles Elliott Andrews, President, Chief Financial Officer, $1,558,599 (2006)[7]
Robert S. Autor, Chief Information Officer
Selected members of the Board of Directors: [8]</p>
<p>Ann Torre Bates
Charles L. Daley
William M. Diefenderfer III </p>
<p>Nelnet
Rank: 895 (Previous rank: N.A.)
Get quote: NNI
Financials: Latest quarterly results
CEO: Michael S. Dunlap
Address: 121 S. 13th St., Lincoln, NE 68508
Phone: 402-458-2370
Website: Student</a> loan products and services ::: Nelnet</p>
<p>FORTUNE 500 Headquarters</p>
<p>Click to enlarge
Show FORTUNE 500 Companies:
Top 50 | 25 Most profitable | Full list $ millions % change from 2005
Revenues 1,874.4 52.0
Profits 68.2 -62.4
Assets 26,796.9
Stockholders' Equity 671.9
Market Value 3/23/2007 1,264.6
Profits as % of<br>
Revenues 3.6
Assets 0.3
Stockholders' equity 10.1
Earnings per share<br>
2006 $ 1.27
% change from 2005 -62.3
1996-2006 annual growth rate % N.A.
Total return to Investors %
2006 -32.7
1996-2006 annual rate N.A.</p>