SallieMae is the government backstop for student loans. SallieMae is providing lows at a lower rate than their cost of capital. This is a recipe for bankruptcy and another taxpayer bailout.
SLM Sells Debt at Higher Rate Than Students Pay: Credit Markets
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Sallie Mae, as the company is known, sold $1.5 billion of 8 percent notes due in 2020 at a yield of 8.25 percent, according to data compiled by Bloomberg. Stafford federal loans disbursed between July 1, 2009, and June 30, 2010, have a fixed interest rate of 5.6 percent, according to the company’s Web site.
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