Credit Crunch Extends to Student Loans

Students' fed loans jump 25% from previous year

(NEWSER) - Some two-thirds of students borrow for college today, and they’re borrowing more than ever: For the 2008-2009 school year, the federal government loaned students $75.1 billion—25% more than the year before. That’s the biggest increase on record, the Wall Street Journal reports. The trend has troubling implications for grads, as many see their life choices pinched by the cost of their diplomas. (Average debt load: $23,186). More»

Parents face tough choices as debt-ridden kids struggle to find work

(NEWSER) - The families of many debt-laden college graduates are pondering bailouts of their own as the job market sours, the Wall Street Journal reports. With the average student loan now $22,000, parents of some struggling grads face a tough choice—to let their kids learn a lesson about credit the hard way, or to give them a helping hand and a lecture. More»

Analyst gives four signs of sanity to scan your tea leaves for

(NEWSER) - The main thing ailing the credit markets is a crisis of information, writes L. Gordon Crovitz in the Wall Street Journal, so it’ll probably end when we have some. Things may be looking up when…

• Prices are discovered: Right now, there’s no demand for mortgage-backed securities, and hence no price. When we see some transactions that don’t involve the government, the picture will be clearer.

As credit outlook deteriorates, most important word is 'trust'

(NEWSER) - Constant references to the Great Depression aren’t alarmist, but the analogy isn't perfect, either, writes David Leonhardt in the New York Times. "The basic mechanics of how the economy might fall into a severe recession look quite similar to those that caused the Depression," he explains. "In both cases, a credit crisis is at the center of the story." More»

Five reasons to fiddle while Wall Street burns

(NEWSER) - For a dedicated silver-lining hunter like Michael Lewis, there are plenty of upsides to the total collapse of the US financial system. “A lot of attractive office space seems to be opening up in midtown Manhattan, for instance,” he writes in Bloomberg. Here are five other reasons to celebrate:

• We get to see what’s inside big Wall Street firms. Lehman Brothers’ smoldering pile of liabilities should prove illuminating.