Real life result of credit crunch: no more student loans

If you thought the credit crunch was a financial phenomenon confined mainly to Wall Street, think again.  Among its real life effects is that college students are no longer able to get student loans.  Example, Pennsylvania’s Higher Education Assistance Agency has stopped giving student loans as a result of the frozen credit markets.  Normally, it would sell bonds to investors to finance the loans it gives to students for college.  Now the PHEAA has been unable to sell its bonds and has had to stop giving student loans.  Instead, it’s referring families to various private banks which may or may not lend the money.  This is a rolling problem cropping up in the states – not just Pennsylvania.  (E.g.: Michigan http://media.www.michigandaily.com/media/storage/paper851/news/2008/02/14/Government/Student.Lending.Woes.Worry.u.Officials-3210042.shtml)