Sallie Mae (SLM) Rises On Better Loan Terms From Education Department

May 21, 2008 2:57 PM EDT

SLM Corp, better known as Sallie Mae (NYSE: SLM), is rising today after the Department of Education disclosed terms of a plan to buy loans, helping to ensure there's enough money for students to go to college. SLM is up $1.19 or 5.73% today on this news, but is still down over 60% this year.

Education Department officials told Sallie Mae execs and other lenders yesterday that the government will begin a one-year program to buy student loans.

Bruce Harting, a Lehman analyst, issued a noted to clients about the development, "This plan is a significant positive for the industry and Sallie Mae in particular as it should allow the company to gain considerable market share and ensures a healthy level of profitability on new loans.''

President Bush, signed a law on May 7, allowing the Education Department to buy loans that private lenders, who have been unable to sell them because of the credit tightening that's ongoing in the marketplace.

So the bottomline is the government wants to ensure that students get loans and this move by the Education Department should help encourage lending activity.

Related Categories

Corporate News
Trader Talk

Stocks Mentioned

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?