HIST 12B Lecture Notes - Lecture 2: Education Management Corporation, Sallie Mae, Profit Margin
Document Summary
1995 sallie mae issues first student loan asset backed securities. Recovering defaulted loans: garnish social security payments. Can t discharge student loans through bankruptcy; no statute of limitations for student loan collection. Recovery rate defaulted student loans close to 100% (profit margin about 30%) Inequality: black student default four times that of whites; lgbtq and undocumented students carry higher debt (latter not eligible for federal loans) Strike debt launched the rolling jubille fund, bought up debt for pennies on the dollar and cancelled it rather than collect. Department of education shut off federal loans to corinthian but also released 35 million to keep it afloat and sold 85 campuses to ecmc (education credit management.
