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Buying Money
April 16, 2007







The Washington Post is running an article entitled, "Investor Group to
Buy Sallie Mae for $25B."

The article explains, "The sale price of $60 per share is nearly 50
percent higher than Sallie's stock price as of late last week,
representing the premium investors placed on Sallie's $142 billion
student loan portfolio and the cash it generates. Sallie Mae stock
closed at $40.66 on Thursday, the day before news of a possible sale
of the company was first reported. The price rose above $55 in pre-
market trading on Monday."

As the costs of higher education continue to rise, the article explains
that the prospects for loan companies look good.

Read a Related Article!!


Discussion-Starters for Younger Children

  • Ask your students what money is. Encourage them to articulate
    their thoughts.
  • Consider asking them to draw a picture in which
    somebody is using money.

  • Ask your students how people can make money. Where does
    the owner of a grocery store get the money needed to pay
    his/her workers?
  • Students could develop stories of somebody working to
    earn money.

  • Do your students know what a bank is? Why would somebody
    keep their money in a bank?
  • Students could develop commercials explaining why it is
    important to keep money in banks.

  • Pose: How much money would you sell a specific toy for?
    What if somebody wanted to buy the toy but they did not have
    enough money to pay for it immediately? What would you do?
    Why would you do this?
  • Consider working with students to collaboratively
    develop a list of options that students might have if this
    situation arose.


Discussion-Starters for Older Students

  • Vocabulary terms to discuss: Investor; Premium; "Student
    Loan Industry"; and, Liquidity.

  • Do your students think that the United States government
    should subsidize loans to enable more people to attain a higher
    education? Why/why not? The government gets its money
    from taxes. Why should somebody who does not attain
    education beyond high school help pay for somebody else to
    receive an education? Does education enhance society? If so,
    how?
  • Students could use a T- Chart to explore the pros and
    cons of having the government subsidize higher
    education grants and loans.

  • Do your students think that it's important for government
    officials to oversee the activities of banks more closely than it
    oversee the activities of other businesses? Why/why not?
    Should the United States government have to approve the sale
    before the ownership of Sallie Mae officially changes hands?
    Why/why not?
  • Consider asking students to pretend that they are the
    members of a Congressional committee considering
    whether or not to require Sallie Mae to attain
    Congressional approval for it's sale. Students might
    prepare memos before participating in this committee
    meeting.

  • What can savvy people learn from considering the price of
    stocks? Is this knowledge important? Why/why not?
  • Ask students to select a publicly traded company,
    investigate it's stock price and explain what beneficial
    can be learned from knowledge of this price. The
    information learned should be broader than simply the
    share's price.
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(C) 2007, Andrew Pass Educational Services, LLC.
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