Sallie Mae (Student Loans) Going Private

[ThomWV]

http://money.cnn.com/2007/04/16/news/companies/sallie_mae.reut/index.htm?cnn=yes

Someone explain the implications of this to me.

[hobbit709]

1. Once again

Somebody gonna get screwed! And that somebody won't be any of the big boys.

[MadHound]

2. The implication is that student load rates will probably go up,

Thus further limiting the number of people able to attend college. Those who are able to attend college will be coming out with a larger debt load, thus affecting their purchasing power, and frankly the rest of their life. Meanwhile corporate America and the financial sector will make record profits.

[michaelwb]

3. Isn't it already private?

According to the story you link to:

Sallie Mae was created in 1972 as a quasi-governmental company known as a "government sponsored entity." The company began cutting its direct government ties in 1997, a process completed in 2004.

It's been private for a couple of years.

[alarimer]

4. Now they'll really start gouging you

I had a Sallie Mae student loan and the interest rate was never higher than about 7%. I had private student loans that were as high as 12% PER YEAR. I just figured this out (now that I paid them off) that I paid over 65% in interest over the 15 years of the loan. The original one was something like 14k and I think I ended up paying more that 20k on that one alone.

Why are student loans not structured like car loans or personal loans? Say you borrow 10k and the interest rate is 8% on a personal loan. 8% of 10k is $800, so the total amount you borrow is 10,800. Divide that by the term of the loan and you have equal payments of whatever for say 60 months. But with my student loans, I paid at least 6% interest PER YEAR; it was only when the principal got low that the payments started being manageable.

[Nutmegger]

5. I'm so sick of this crap.

I know many students who are on nothing but loans. I'm not talking 8k or 10k. I'm talking 50k, 60k and up. And this is for a four-year degree. It's absolutely obscene and needs to be ended immediately. These loan sharks don't give a damn about the students.

[OneBlueSky]

6. easy . . . if you have student loans, once you graduate or otherwise leave school . . .

your ass will be owned outright by JP Morgan Chase and Bank of America . . .

[undeterred]

7. Back in the seventies my first student loan was 3%... inflation was higher

Thats the way it oughtta be.

[BlooInBloo]

8. No more federally subsidized student loans - the beginning.