"For decades, individuals and companies bought auction-rate debt from municipalities, charitable organizations, student lenders and closed-end mutual funds," The Wall Street Journal reports. "The securities had long-term maturities but functioned like a short-term investment, paying interest rates that were reset in weekly or monthly auctions conducted by Wall Street firms. Brokerage firms and financial advisers pitched them to investors as a safe place to stash one's cash and collect a higher yield than a money-market fund offered, often tax-free. As a result, the $330 billion auction-rate securities market attracted many investors who were risk-averse... But beginning in February, as the subprime-lending crisis spread to affect nearly all areas of the credit markets, auctions failed to attract sufficient bidders. Ms. Walsh's portfolio of auction-rate securities was entirely student-loan backed. This $80 billion portion of the auction-rate market was hit particularly hard because the interest rates reset to very low levels -- in some cases to 0% -- when the auctions failed, leaving already troubled student-loan companies little incentive to refinance."