Straight Talk on credit market conditions
The ongoing turbulence in the financial markets has been extraordinarily challenging for student lenders and the rest of higher education community.
Hundreds of higher education institutions that regularly rely on the availability of reasonably priced credit to finance their day-to-day operations have been unable to access critical short-term funds. The situation underscores how these difficulties are impacting institutions on multiple levels regardless of their financial soundness or quality.
Amidst these unfavorable economic conditions, Sallie Mae has processed all federal student loan applications for every eligible student at every eligible college. For 35 years, we have been dedicated to providing access to students and meeting the needs of our valued school customers. Current market conditions do not change those commitments. In fact a recent letter issued to our shareholders (PDF, 24KB) spells out in detail how Sallie Mae is strongly positioned for the future.
As the largest, lowest-cost originator, servicer and collector of student loans, Sallie Mae is able to achieve efficiencies for our customers that our competitors cannot match. This gives us the ability to operate and invest amidst extremely low, but adequate, margins on federal loans. Our investments in products such as the new Education Investment Planner demonstrate our continued commitment to helping all American families achieve their education dreams.
Emergency Economic Stabilization Act of 2008
Properly functioning credit markets are vital to the financial health of American consumers, including those in pursuit of a higher education. On behalf of our more than 10 million student and parent customers, we commend leaders in Congress and the White House for passing legislation to alleviate the prolonged credit market deterioration and its impact on all American consumers.
As the nation’s leading saving and paying for college company, we are encouraged by recent bipartisan efforts to address the unprecedented disruption in the credit markets and guarantee uninterrupted loan access to current and future students and their families.
As the markets strengthen, students and their families will directly benefit from lower cost student loans and broader funding options. The bipartisan support for the Emergency Economic Stabilization Act of 2008 should be another step towards ensuring sufficient capital to make new student loans, and keeping the increasingly important goal of higher education within reach of all American families.
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