http://www.cnbc.com/id/24760352/for/cnbc/

...Distress in the $330 billion market for auction-rate securities in recent months — itself an offshoot of the subprime mortgage crisis — has caused more than 80 student lenders, including some state agencies, to stop making federally guaranteed student loans either temporarily or permanently.


On Tuesday, Bush administration officials told lenders that the government would buy up their student loans to ensure the companies have access to capital. Congress recently gave the Education Department the authority to do so.





The administration also has agreed to have the government invest in securities made of student loans bundled together, traditionally the exclusive province of private investing companies in a market that has become stressed. The move is expected to make capital available to student lenders at cheaper rates than what they can get by issuing student loan securities on the market. Borrowing costs for lenders rose dramatically as a result of the disruption in the credit markets...
So here we have a great example of a major problem staring us in the face. Sallie Mae, Fannie Mae, Freddie Mac, all in big trouble and there are signs pointing to the government intervening to keep them whole.

Guess it's still gonna be a bitch to get an education without becoming a slave to some dude whose equity depends on you getting your job and paying him off.