Citigroup announced on Friday, September 19, 2010, that the company was planning to sell its student loan business and $32 billion in related assets. Citigroup currently has $1.94 trillion in assets and $413 billion in long-term debt. Additionally, the company also has $1.78 trillion in other liabilities. Citigroup has large amounts of assets that are not easily converted into liquidity. This means it is harder for Citigroup to transfer its assets into cash if the company needs to pay off its short-term debt. In addition to Citigroup high debt in the fourth quarter of December 31, 2009, the company’s net income to common was a negative $7.58 billion. In August 2008, Citigroup agreed to buy-back $ 7 billion of bad debt. Citigroup's troubles started when the housing crisis loomed; conversely, the majority of the loans went into default. People were not even paying on their principles. The company’s plan is to sell some of its assets to pay down its long-term debt. So society asks, "Why is Citigroup selling its student loan business?" To answer the question, the government also announced that it will no longer protect private student loans. These loans were for students who wanted to get additional loans while they were in school to cover additional expenses. Neither subsidized nor unsubsidized loans were affected. However with a broken economy, who knows what the future will bring.
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