Berkshire Hathaway 2009 Annual Meeting Audience Question # 38

Warren and Charlie don’t know much about the student loan industry

Warren Buffett:

Area 7.

Audience Member:

Good afternoon. Mike Nolan from Montclair, New Jersey.

Until recently, the student loan business in the United States has been a very attractive and successful one. However, proposed changes coming out of Washington have thrown the industry into disarray.

Could you comment on the industry, which is highly reliant on both faith, trust, as well as financing, and talk a little bit about the companies in this business?

Warren Buffett:

Yeah, I don’t know that much about it. Maybe Charlie does.

Charlie Munger:

No, I don’t know this much about it, either. There’s been a fair amount of scandal, in terms of the sales methods. Some of the companies in the field got awfully cozy with some of the university administrators and so on.

Warren Buffett:

It’s been a long time since Charlie and I thought about getting a student loan. So we… haven’t checked the regulations too carefully on that one.

Charlie Munger:

But, you know, we don’t know a lot about it.

Warren Buffett:

Yeah.

I actually got approached, I guess it was about a year ago or a year and a half ago, on the deal that fell through, on Sallie Mae.

And I said, at the time, to the fellow that called me, I didn’t understand it that well. And it turned out to be a good thing I didn’t.

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