Have you ever checked out this guy:

Alan Collinge? He runs an organization called Student Loan Justice. The short story is that Collinge had an unpleasant encounter with Sallie Mae and now appears to have dedicated his life to being a pain in the ass to Sallie Mae. Check out his web site and you'll get the full flavor of his story and his over the top efforts. It's sort of like a messy version of Michael Moore's "Roger & Me", except with more vengence.

We've never met Collinge, but take all this with a grain of salt, we think there's another version to the injustice.

The point is: Wow. He does have some influence. All the kookyness aside, Collinge doesn't get dissed or stood up by senators and congressmen. People are forced to listen to him as a result of his self-promotion.

We're wondering if the student lending industry has an anti-Collinge that will stand up and take on the issues. I'm sure the industry is taking applications for the anti-Collinge. And look what Student Loan Justice has done: they've created a PAC. That means that Collinge doesn't have to work anymore. He pays himself a salary to drive his bus around the country to crusade for student loan justice. Doesn't sound like a bad gig if you ask us.

And the winner is.....

......JC Flowers - JP Morgan Chase - BankofAmerica! Yup, when the dust settled, that was the winning lineup....offering $25 billion for Sallie Mae. JC Flowers will take a slightly better than 50% share while JP Morgan and BofA will take about 25% apiece.

The one thing that will be interesting here, is what these private equity firms are going to do with Sallie Mae. These companies typically are looking for an exit point to monetize any gain on investment. These gains are usually created by selling off non-core parts of companies. Heaven knows Sallie Mae has a number of non-core business lines: their IRS collections company, their student loan guarantee line, their account servicing line, their financing function, their marketing arm. Whoops, that's pretty much all Sallie Mae does. The point is, it won't be hard to break the company up into functional parts and package them up into attractive investments.

Weekend Update

We were out of town for a few days but now back. What have you missed? Here's a summary:

1. Rumors of Sallie Mae being purchased by the Blackstone Group, JP Morgan, and/or possibly others. Our assesement is that such a transaction will not materially impact the industry, Sallie Mae's arrogance, or the earth's rotation. Sallie Mae will merely have a new owner. Blackstone is a private equity firm whose net income is larger than most countries GDP in the world. And Chase bought Collegiate Funding Services not too long ago to compliment their growing student loan business.

2. According to the Dept of Education, student loan companies have been mining the National Student Loan Database. We find this curious, as NSLDS has two interfaces: one for students, and one for student finance participants. In either case, the loan info can only be displayed one record at a time. And even with this severe restriction, no one screen or view details a borrowers entire perspective. It's not easy to mine NSLDS given the interfaces that the Dept of Ed offers. Which leads us to the conclusion that some lenders have been granted access to the raw data. Moreover, the Department of Education is again failing to police their own regulations. So yes, with absolutely no enforcement, there will indeed be rogue lenders that blatantly challenge the system. It certainly doesn't justify the actions of these lenders.

3. Article in Friday April 13, 2007 Wall Street Journal that details the revolving door between student loan industry employment and Department of Education employment. There's a whole slew of folks that have been going back and forth for a number of years. We're very concerned about all this. The damage has most likely already been done, but we don't think we'll see a whole bunch of this continuing.