This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Student Lender Rally May Be Brief

Private student lender stocks jumped following the federal government's decision last week to bolster the market, but their longer-term prospects are clouded by fretting among legislators and schools that students rely too heavily on unsubsidized lending.

Policy makers and education advocates have thus far offered lukewarm support thus far for the Term Asset-Backed Securities Loan Facility, or TALF, which will provide up to $200 billion to finance the purchase of asset-backed securities secured by a variety of debt, including student loans. The facility, unveiled by the Federal Reserve and Treasury last week, is intended to provide liquidity for private lenders, so that they are freed up to make more loans, benefitting borrowers.

"We hope that this new program will work as intended: To get credit markets flowing again and make loans more accessible and affordable for students and families," committee Chairman George Miller (D., Calif.) said in a statement last week. "We look forward to learning more details about this proposal so we can be assured that it will operate in the best interests of America's college students, their families and taxpayers."

A committee spokeswoman declined to elaborate on Miller's statement. But schools and legislators want students to borrow more from the government -- and, in turn, less from private sources -- than they are currently doing. The Ensuring Continued Access to Student Loans Act of 2008 increased federal loan limits in order to "reduce borrowers' reliance on costlier private college loans," according to a statement on the Web site of the House Committee of Education and Labor.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
C $52.81 -0.17%
FMD $6.38 -6.90%
GS $196.55 -0.73%
NNI $45.81 0.42%
SLM $10.22 -0.24%


DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs