"Three of the largest nonprofit student loan lenders have temporarily withdrawn from lending in the Federal Family Education Loan program despite a high-profile plan by the Department of Education designed to assist non-bank lenders in financing student loans," The Bond Buyer reports. "Brazos Higher Education Service Corp., NorthStar Education Finance Inc., and the Pennsylvania Higher Education Assistance Agency, historically some of the largest issuers or obligors of tax-exempt debt backed by student loans, have suspended their FFEL lending because they cannot secure crucial 'bridge loans' that they need to participate in a new, short-term liquidity program run by the Department of Education, their officials said. Specifically, DOE officials told lenders that once they tapped a line of credit and received bridge financing, the lenders could disburse their student loans, after which they would be eligible to borrow funds through the department once a week, via a 'custodian.' But details of the program - many of them technical - remain unresolved and lenders say they have not had enough time to find any bridge lender comfortable with it."
You can read the complete August 13, 2008 Bond Buyer article on-line.
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