NEW YORK - With the demand and price of higher education climbing skyward, student loan ABS is expected to be the next hot growth sector, noted a panel of representatives from the three largest student loan issuers - Sallie Mae, Nelnet and First Marblehead Corp. - speaking at Deutsche Bank Securities' 2005 ABS Conference last week.

Mark Daly, director at Sallie Mae, said his company plans to issue around $20 billion in term ABS in 2005, down from its usual $30 billion. Sallie recently completed its transition out of GSE status nearly three years before its scheduled completion date.

Nelnet Executive Vice President Cheryl Watson, said her company has issued $5 billion so far this year, and plans to issue $5 billion per quarter for the rest of the year.

Speaking for the smallest of the trio, First Marblehead Senior Vice President Lee Wilson, said his company has issued $2 billion so far in 2005 and will continue issuing $2 billion per quarter. Wilson said he expects the student-loan sector to reach $70 billion to $90 billion levels of issuance per year in the near future.

Earlier in the conference, Deutsche Bank analyst Anthony Thompson pointed out the astonishing fact that in 1987, credit card and auto issuance dwarfed all other sectors, accounting for nearly 100% of the deals in the market. That number has declined steadily to a figure of 21%, as home equity has steadily risen to a 62% share of the market.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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