| Unless you've been hibernating for the winter, you've | | | | very certainly a financial product. Is there or will there |
| probably noticed the financial markets are a huge | | | | be a credit crunch in this market that will make |
| mess. Specifically, the machinations of the mortgage | | | | getting student loans a more difficult proposition? |
| market are spreading to other fields. The question is | | | | Well, the answer is a bit murky. |
| whether this affects student loans? | | | | First and foremost, government loans should not be |
| Although you might not think it, the financial fields are | | | | impacted in the least. The government has plenty of |
| really tied together in many different ways. Think of | | | | money from tax payers. It is happy to spend it. The |
| it as a pie. Most of the cuts we are familiar with - | | | | amount allocated to student loan programs is not at |
| home loans, auto, business loans - are actually tied | | | | risk. The government will not use it for some other |
| together on the back end where we don't really see. | | | | purpose such as propping up the mortgage industry. |
| To this end, many of the financial companies that we | | | | Private student loan providers, however, may be a |
| think of as big retail options are just that - retail. | | | | different story. The problem here is we are talking |
| They rarely will hold on to loans to administer the | | | | about commercial lenders. These companies tend to |
| repayment process. Instead, they resell the loans to | | | | be tied into the same financial providers as those in |
| a secondary market of investors. These investors | | | | the other financial sectors. As such, money could be |
| then administer the loan and reap the profits over | | | | a bit tight given the credit crunch. Some believe, |
| time. Given the huge losses in the mortgage market, | | | | however, that there will actually be more money |
| we've actually even seen a few of these companies | | | | available for student loans. Investors need |
| as they declare monster losses. They range from | | | | somewhere to park their money for solid gains. |
| Swiss Insurers to Merrill Lynch. | | | | Student loans are hardly a bad place. |
| Ah, but what about student loans? Student loans are | | | | |