As the clock winds down on a hulking year for ABS, the eyes of analysts and bankers are turning toward 2005, and expectations are mixed. As market participants make their calls for the New Year, the one asset class that has garnered the most varied predictions has been the student loan sector.

Peter DiMartino, ABS strategist with RBS Greenwich Capital, sees student loans as the class with the greatest growth potential and forecasts issuance will grow by 20% to around $60 billion next year. "2005 will be an unusual year for student loan ABS. Never before has the sector expanded while its largest issuer, Sallie Mae, reduced its issuance volume from the prior year. It could happen in 2005," said DiMartino. A significant portion of the sector's increase will stem from the private student loan market, he added.

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