Early Briefing: Sallie Supports Loan Changes
For the past two decades, every attempt to overhaul the $85-billion-a-year student loan industry by eliminating subsidies to lenders has faced insurmountable opposition from one of the most powerful institutions in the business: Sallie Mae, the world's largest student loan company.
But in a dramatic reversal, the Reston lending behemoth now supports President Obama's efforts to kill the subsidies it has tried to protect for so long. Instead, the company has offered a proposal that calls for the government to hold on to the loans itself and pay private companies for originating and servicing them.
Sallie's plan is still slightly different from the one advanced by the administration, which entails the government originating loans itself. But the company's turnaround, which surprised many in the industry, could make it more likely that the administration will succeed in transforming the way that millions of students pay to attend college.
Frustrated trying to learn German through traditional methods of repetition and rote grammar memorization, Allen Stoltzfus spent a year as a college student studying economics at a Germany university.
It worked. And Stoltzfus returned to the United States convinced that full immersion was the fastest and most effective way to learn a foreign tongue. That was his inspiration for a firm that would eventually become Rosetta Stone, which last month made its successful debut as a public company on the New York Stock Exchange.
The company hopes to use the money it raised to grow expand operations abroad and introduce new types of Web-based language instruction software. But analysts said the market for language learning is highly competitive and diverse, and revenue depends on a steady demand from customers. Rosetta reports results for the first three months of 2009 at the close of trading today.
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