I See No Bubble, Says Bubble Maker
by Daniel Luzer
Albert Lord, the CEO of Sallie Mae, one of America’s largest student loan corporations, told industry analysts Thursday that he believes the reports of a student loan bubble are greatly exaggerated.
According to an article by Sarah Mulholland at Bloomberg News:
“We don’t see anything of any evidence close to a bubble,” Lord said today on a conference call with analysts. “This country underwent a significant financial crisis in our very recent past. It’s not really a surprise that many see bubbles around every corner.”
Lord’s comments address concerns that U.S. households could buckle under the burden of growing student loan bills, with educational debt at $1 trillion, according to the Consumer Financial Protection Bureau. Tuition expense has risen about three times as fast as wages since 2001 before accounting for inflation, according to data from the Labor Department.
SLM, known as Sallie Mae, boosted its originations of non- government-guaranteed education loans to $1.2 billion in the first quarter, up from $940 million in the year-ago period, according to a statement yesterday. The Newark, Delaware-based company is forecasting $3.2 billion of originations in 2012.
He apparently did not specify what conditions would have to be present in order to demonstrate a real bubble.