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Student Loan Q2 Profit Rises - Update
(RTTNews) - Monday, a subsidiary of Citibank, N.A., Student Loan Corp. (STU | charts | news | PowerRating), a company engaged in management and servicing of student loans, announced second quarter results, reporting a 26% increase in net income from the prior year, on 27% revenue growth. The higher revenue was mainly due to the gains on securitization and other loan sales and higher fee and other income, which were partially offset by a reduction in year-over-year floor income.
The company's second-quarter net income increased $20.9 million to $101.81 million, or $5.09 per share, from $80.91 million, or $4.05 per share, in the year-ago quarter. The growth in net income was attributed to $42.3 million after-tax gain on sales associated with $2.2 billion student loan securitization.
Returns on average equity for the second quarter climbed to 31.2% from 26.8% in the previous year's similar quarter also reflected higher net income.
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New rules give people more flexibility to consolidate student ...
Recently signed federal legislation has eliminated the "single-holder" rule for student loans, giving borrowers more flexibility when consolidating. Under the old rule, borrowers whose loans were held by a single company were not allowed to consolidate with any other lender, even if they could get better interest rates or repayment terms somewhere else. Now, students can consolidate their loans with any company they choose, even if one company holds all of them. Those with student loans are being encouraged to consolidate existing loans as a way to lock into a lower interest rate and avoid rate increases that are coming soon. Interest rates on Stafford loans will rise to 7.14 percent, from 5.3 percent, on July 1. PLUS loan rates will jump to 8.5 percent, from 6.1 percent. Charles Wallace, manager of the Huntington National Bank office at 17 S.