...Similar to other consumer assets, student loans were not immune to the challenges of 2008. The economic crisis gathered steam in the second half of the year, virtually shutting down funding sources and consequently threatening continued access to education funding. Many lenders either suspended the Federal Family Education Loan Program (FFELP) and private loan originations, or overhauled their business practices to adjust to the changed environment. The industry witnessed a series of government intervention intended to provide market liquidity so that students could continue to finance their education, including the Asset-Backed Commercial Paper (ABCP) Conduit and the Term Asset-Backed Loan Facility (TALF). One major casualty of the economic crisis was the auction rate market. Failed auctions pressured collateral performance of student loan asset-backed securities (ABS) and, as a result, Fitch Ratings launched a full review of all ABS trusts that financed auction rate securities (see Rating...
