Detroit News: Michigan Student loan plan halted

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http://www.detnews.com/apps/pbcs.dll/article?AID=/20080...

Student loan plan halted
Marisa Schultz and Mike Wilkinson / The Detroit News
The state of Michigan has suspended one of its student loan programs indefinitely, shutting off one avenue for students to pay for college and raising troubling new concerns about the stability of the student loan industry nationwide.
"It feels to me we are headed to a real crisis in the student loan world for reasons unrelated to the student loans -- it's the whole economic downturn," said Rick Shipman, director of financial aid at Michigan State University.
Blaming a credit crunch rooted in the collapse of the sub-prime home loan market, Michigan will not offer new loans through MI-LOAN, a program created in 1990 to help bridge the gap between federally subsidized loans -- which are capped -- and the rising cost of tuition.
The suspension of MI-LOAN could be a sign of what's in store for other nonfederal student loan programs, commonly called private loans or alternative loans, financial experts say, and the fallout could narrow options for students seeking help.