Sallie Mae’s slippery slope
Sallie Mae (SLM) is getting crushed again. Shares of the student lender hit a new low in morning trading while the company conducted a teleconference with investors. No word yet on exactly what recently reinstated CEO Albert Lord said, but the company promised Monday that he would discuss Sallie’s botched buyout attempt and “provide a broad outlook for 2008.” Sallie last week cut its profit forecast, so it’s not clear how much more detail investors can expect on that front. (Update: Lord said rising borrowing costs are belting Sallie’s bottom line, Bloomberg reports.)
One area in which Sallie clearly could do better, though, is in disclosing Lord’s stock sales. The Wall Street Journal reports that a recent Sallie Mae press release understated the amount of stock Lord was selling and overstated the amount of stock he continues to hold. The company said in restoring Lord’s CEO title last week that he brings “stability of leadership and vision,” but it’s becoming clear that his leadership is deeply flawed.
And that’s why you don’t exploit students.
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“Exploit Students?” Did you not read the contracts you signed? I want to bank where you do. Nothing is required other than going to school to get an education, get a job and pay your loan back. When you don’t pay the bill, how do you foreclose or reposses an education? When a loan is defualted on it’s the guarantors that purchase that loan and try to make restitution. Sallie Mae does not have the ability to put a lien on your property, garnish your wages or take your income tax return. But they sure do take the hit in the media. All those poor borrower’s that decided to take the full amount of the loan to party through school now have to pay the loans back and are crying foul. Boo-Hoo! Shame on you for not being responsible with your funds. There are millions of people out there that do pay back their loans and are happy with Sallie Mae. Go to Direct Lending. See if letting the government loan you money is any better. Because you know the government is so savy with taxpayer money now, right?