Well, it could be worse....the bond pools could be forced into liquidation if the interest owed on the leveraged student loan bundles Plus middleman expenses exceeds the interest collected. Subsequent fire sales and the associated transaction costs would likely deplete the original investor's value to some low level.

But if this continues for any period of time, I suspect there's going to be few private student loans available, with increased reliance on Stafford, Perkins and Plus loans

Collateralized anything is having a rough time right now...with the exception perhaps of hard assets, although in the face of a slowing economy, even those may be facing some form of devaluation, potentially putting the squeeze on current distributions.

BruceM