"The credit crunch that has roiled the financial and housing markets nationwide has hit Michigan college students squarely in the wallet," The Detroit News reports. "Students and parents at MSU have been particularly hard hit. About 98 percent of federal loan borrowers at MSU participated in Michigan Students First, a state-run program that offered unprecedented benefits to its borrowers: Rebates on all origination fees and 0 percent interest after three years of on-time payments. The bright spot in all this: The federal government recently increased the caps on federal student loans by $2,000 annually, a move that should reduce the need for high-interest private loans. And the federal government's direct lending program is stable, said Draeger, of the National Association of Student Financial Aid Administrators. A real crisis would occur if the federal government stopped making loans, and Draeger said he can't foresee that happening. 'The doors of higher education are still open, and (students) shouldn't be deterred from attending school,' Draeger said."