SLM Corp., the largest U.S. student lender, last week sold $1.1 billion of securities backed by private student loans, and demand for the riskiest part of those loans was 15 times greater than the supply, the Wall Street Journal reported today. Meanwhile, SecondMarket Holdings Inc., a New York-based trading platform best known for private stock shares, said that it would roll out a platform today to allow lenders to issue student-loan securities directly to investors. But while investors are piling into student loans, borrowers are falling behind on their payments at a faster clip. According to a Thursday report by the Federal Reserve Bank of New York, 31 percent of people paying back student loans were at least 90 days late at the end of the fourth quarter, up from 24 percent in the fourth quarter of 2008. The figures include both federal student loans and those issued by private lenders.
