Student Loans Pose a Challenge Amidst a Struggling Economy

The future of America resides in the youth that come into their own today and achieve their dreams so that they can apply themselves to a better tomorrow. Of course, this often means going to college and finding a study that is right for you, and then applying yourself diligently to that subject and then developing a career based on it. A perfectly fine idea in itself, but the process today can be quite a struggle, especially when one considers the degree to which the economy imposes tough situations on aspiring would-be students looking to get into college for the first time.

In recent history, loaners have tightened their standards considerably when it comes to potential debtors. The mortgage industry crisis has sent out shock waves that have caused a considerable impact on adjacent prospects, such as loans for all sorts of purchases and investments. Unfortunately, education was not spared, and it is pretty challenging for someone just starting out to try and find a good way to get into a promising school by means of securing a loan and using it to finance his or her tuition.

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Doing the student loan shuffle

For students heading to college this fall, getting financial aid will be a good lesson in money management. It may be tricky to find loans, and the landscape seems to change from one week to the next.

For many borrowers, private loans will be hard to get. That's because several of the nation's largest banks have either shut down or significantly reduced their private student loan programs.

Last April, The Education Resources Institute, or TERI, -- the nation's largest nonprofit student loan guarantor -- filed for Chapter 11 bankruptcy, pulling even more private lenders out of the student loan market for the upcoming 2008-2009 school year. According to the Project on Student Debt, a Washington, D.C.-based nonprofit agency dedicated to curbing student loan debt, that could mean "bye-bye loan" for the 8 percent of all undergraduate students currently relying on private loans to foot some, if not all, of their college expenses.

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Offers to Purchase or Exchange Commenced in Respect of $6 Billion of Brazos-Serviced Auction Rate Securities

The Brazos Higher Education Service Corporation, Inc. announced that Leon Higher Education Authority, Inc., a Texas non-profit corporation for which Brazos acts as master servicer, is making offers to purchase or exchange in respect of approximately $6 billion aggregate principal amount of student loan-backed securities, almost all of which are auction rate securities (the "existing notes"). Brazos acts as master servicer for the companies that have issued the existing notes that are the subject of the offers: Brazos Higher Education Authority, Inc., Brazos Student Finance Corporation, Academic Finance Corporation, Trinity Higher Education Authority, Inc., Educational Funding Services, Inc., Federated Student Finance Corporation and EdInvest Company. The offers are being made with respect to existing notes issued under thirteen separate indentures, each of which is secured by a specified pool of student loans (the "underlying loan assets").

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The credit crunch: Loans out of reach

Interest rate spreads. Libor. Collateralized debt obligations.

Unless you're fluent in the language of high finance, it's tough to make heads or tails of all the terms being tossed around in the headlines lately.

Simply put, the meltdown on Wall Street has made it tough for many Americans to get a loan to buy a home, purchase a car, start a business or even send a kid to college.

And with all the talk of a credit crunch -- some are even calling it a credit freeze -- it may get even tougher.

But instead of relying on arcane numbers to show that banks are more reluctant to lend to you and me, as well as to each other, we decided to speak to banking executives and have them explain how their lending standards have changed.

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