Of course, not everyone is hurting from the current state of affairs of college lending. The student loan industry is doing very well, particularly its leader Sallie Mae. In a hard hitting story last week, CBS's 60 Minutes reported that over the last several years, Sallie Mae and their executives have poured $2.7 million into the campaign coffers and PAC's of Congress in an effort designed to keep the competition down and their profit margins up.
And it's working; Sallie Mae's bottom line has gone through the roof. While millions of students and parents have been struggling to find a way to pay for college, Sallie Mae has seen its stock price soar nearly 2,000 percent over the last decade, a run which has enabled their former CEO, Al Lord, to make over $200 million since 1999 - enough to attempt to buy the Washington Nationals baseball team.
Sallie Mae controls loans for more than 9 million borrowers and once Sallie Mae gets a student's account, it's usually for life. Students whose loans are all owned by Sallie Mae have always been prohibited by law from consolidating their loans with another lender when they leave school. But now, under even tougher rules just passed by the Republican controlled Congress, most everyone who consolidates their loans will be barred from refinancing again in order to get lower rates offered by other lenders.
Hasn't the time come for Congress to turn back Sallie Mae's army of lobbyists and repeal the restrictions on consolidation and reconsolidation that are helping to push students' interest costs, and Sallie Mae's profits, higher?
Senator Edward Kennedy of Massachusetts thinks so. In a May 11, 2006 letter to the nation's students, Senator Kennedy wrote,
Let's hope that the rest of Congress listens to the Senator.