WASHINGTON, April 17 (UPI) -- Hedge fund managers are turning their attention to congressional attempts in Washington to fix the struggling student loan business, analysts said.
The managers are interested in a possible bailout of the industry, The Politico reported Thursday.
The credit crisis has pulled the rug out from under the student loan business, making capital for new loans hard to find. Many lenders have stopped making federally guaranteed loans and 19 have stopped offering private student loans. Four state agencies have also quit advancing new loans to students.
Banks, under these circumstances, may sell bundled student loans at a loss, just to step away from the business.
But, with a bailout possible, hedge fund managers "smell money." James Rickards of Global-I Advisors told the Politico.
Legislators are considering a variety of fixes. One is to give the Education Department permission to buy loans, which would infuse capital into the student loan market.
If a bailout is approved, "you'll make money overnight," Rickards said..
