On Tuesday, SLM Corp., also known as Sallie Mae, the nationâ€™s biggest student lender, said it would eliminate a loan program for riskier borrowers. Its decision pummeled stocks of Hoffman Estates-based Career Education Corp. and DeVry Inc. of Oakbrook Terrace and other for-profit education companies. College directors of financial aid, like Teresa Jackson of Knox College in Downstate Galesburg, say the impact of the credit crunch so far has been minimized by continued availability of federally guaranteed loans, competition in the private loan market and declining interest rates, which reduce studentsâ€™ borrowing costs.
National Education, whose Web site said it would continue to fund loan commitments made before Jan. 16, made a wrong bet in August when it bought a $1-billion student-loan portfolio from the Illinois Student Assistance Commission, which acted to minimize its exposure to the developing credit crisis.
FinanSure began making student loans in 2002, generating about $750 million in loans annually and employing about 300, according to former President Tom Sakos.
Ms. Jackson says, â€œItâ€™s one of those companies that cropped up, largely to do consolidations. There was a lot of money to be made. They got paid by the federal government for consolidating those loans.â€