Credit Crunch Spreads to Student Loan Market

Credit Union Journal, The, February, 2008 by Analysis Ed Roberts

Senior members of the House Financial Services Committee called on Treasury Secretary Henry Paulson and Education Secretary Margaret Spellings to help inject liquidity in the student loan market just as the liquidity crisis appears to be seizing up the secondary market for student loans.

The letter says the lenders in the market for federally guaranteed student loans “are now facing sever liquidity problems,” and urges the Treasury Secretary to work with federally sponsored enterprises, like the Federal Financing Bank, Federal Home Loan bank System and Federal Reserve to ensure liquidity and availability of financing.

During a hearing last week, Rep. Paul Kanjorski, the Democrat who heads the Financial Service’s Capital Markets Subcommittee, said “Financing...