Auction Bond Market Collapse:60% Less Student Loans
Wall Street firms that ran the bidding suddenly stopped using their own capital in February
to buy auction-rate bonds that went unsold because of concern about the creditworthiness of insurers that guaranteed the debt.
Auction securities backed by student loans made up about $86 billion of the $330 billion market at the start of the year.
No municipal bonds backed by student loans, including auction-rate debt, were sold in Q1, the first time that happened in almost 40 years.
Without the ability to finance, public authorities in Missouri, New Hampshire, Texas, Pennsylvania and Iowa have suspended or limited their origination of loans.
45 state agencies, private lenders and nonprofit groups out of 2,000 nationwide have pulled out of the U.S.-subsidized Federal Family Education Loan Program...
since December, eroding funding that accounted for about 60% of the $78 billion loans made to students and their parents in 2007.
Hattip to Bloomberg
to buy auction-rate bonds that went unsold because of concern about the creditworthiness of insurers that guaranteed the debt.
Auction securities backed by student loans made up about $86 billion of the $330 billion market at the start of the year.
No municipal bonds backed by student loans, including auction-rate debt, were sold in Q1, the first time that happened in almost 40 years.
Without the ability to finance, public authorities in Missouri, New Hampshire, Texas, Pennsylvania and Iowa have suspended or limited their origination of loans.
45 state agencies, private lenders and nonprofit groups out of 2,000 nationwide have pulled out of the U.S.-subsidized Federal Family Education Loan Program...
since December, eroding funding that accounted for about 60% of the $78 billion loans made to students and their parents in 2007.
Hattip to Bloomberg
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