Law: Double Whammy--- Congress tries to tackle student-loan problems while grappling with the mortgage crisis

In spring 2007 the U.S. was awash in liquidity. Abundant credit fueled a housing boom as well as M and A deals. For student loans, financing was readily available, both for existing lenders and the new entrants who sought to participate in a robust higher education market. Private equity purchasers inked a deal to purchase Sallie Mae for $25 billion.

What a difference a year makes! The Sallie Mae deal collapsed. Credit sources have literally dried up, affecting entire industries -- mortgage lending first, and student loans as well. Paul Sheldon, a Wall Street observer with Student Loan Capital Strategies, says “We have had periods of unavailable capital (late 1980's) which were difficult, but lenders did not go out of business. The viability of private lenders' ability to carry on is in question. This includes small lenders, and the largest lenders alike.” Read the rest in the Greentree Gazette.