US Student Loans hit by Credit Crunch

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The Credit Crunch has impacted all forms of lending, but we’d have thought that Student Loans would have been one of the last product areas to be impacted.

Apparently we were wrong:

Credit crunch takes toll on student loans

In the intensely complicated US loans market, a large number of lenders have gone bust. On the website run by the National Association of Student Financial Aid Administrators (Nasfaa), at least 50 lenders had suspended their loan schemes by the end of June.

The University of Chicago told graduate students on July 2 that its lending partner was unable to renew its line of credit owing to disruptions in the capital markets and the university was no longer able to provide loans to students.

For those lenders continuing to operate, the credit squeeze means that costs are rising.