Skip to: Content
Skip to: Site Navigation
Skip to: Search

October 15, 2008 9:06:35 PM CDT

Learn about Newser Points »

« Back to the grid | Next story »

Credit Crunch Extends to Student Loans

Posted Feb 13, 08 8:27 AM CST in Business 

(Newser) – A huge new group of borrowers—from students to museums to local governments—are about to find their credit drying up, as the subprime meltdown that has already cost banks $100 billion continues to spread, reports the Wall Street Journal.  In the last few days, investors have backed away from buying something called auction-rate bonds, which in turn caused the Michigan's student loan authority to stop making loans yesterday.

They’re not alone. Investors are shunning the securities—which change hands and interest rates continually in auctions—because of surging credit fears. The $325-billion auction-rate market is at a standstill. “I think this is a wave of panic,” said one analyst. Among yesterday's $10 billion in failed auctions—more than 100 of them—were Carnegie Hall and student loan authorities in Mississippi and Montana.

Source Wall Street Journal

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Fannie Mae Loses Billions in Q4

    Feb 27, 08 10:48 AM CST
    Fannie Mae Loses Billions in Q4 Fannie Mae reported huge fourth-quarter losses today, painting an ugly picture both of the economy and the mortgage giant's own future. The company lost $3.56 billion—triple what analysts expected, Bloomberg reports. Derivatives were the big culprit, accounting for $3.33 billion in losses, but the company also reported spikes in late payments and delinquencies. More »

The Carnegie Hall building at 57th St. and Broadway in New York, is seen in this file photo of Friday, Aug. 3, 2007. The tenants who live and work in the studios on top of the building are facing eviction...   (Associated Press)
"If student loan providers are having trouble raising money, then that's a concern for us," says Justin Draeger, spokesman for the National Association of Student Financial Aid Administrators.   (Shutterstock.com)
The credit crunch that has caused more than $100 billion in losses on Wall Street has now extended its reach to college students in Michigan.   (Shutterstock.com)
The auction-rate securities market has dried up as investors have been driven away by credit concerns.   (Getty Images)
ADVANCE FOR OCT. 1; graphic shows tuition and the volume of student loans over time; 1c x 5 3/8 inches; 46.5 mm x 136.5 mm   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (
1
 of 1)

Tags

subprime crisis  • credit market  • borrowers  • student loans  • Carnegie Mellon University  • college loans


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular

Loading...

Other Business Stories

What is Newser?

2008 Codie Finalist

Newser gives you more news in less time. We search for the best and most important stories all over the web, read them for you, and deliver concise and sharp summaries—along with links to the full text. Newser provides a way to stay on top of an ever-expanding horizon of news and opinion—politics, sports, business, trends, technology, personalities, crimes, and controversies. Newser keeps you not just better informed, but, with our signature graphic interface and smart condensed format, more enjoyably informed.

Learn more »