The U.S. ABS market spent a lot of time in 2006 absorbing major shocks, whether it was sweeping reforms for disclosure under Regulation AB, or changes to the Higher Education Act. Next year, according to several market players, the asset-backed securitization business will deliver a few punches of its own.
Student loans is one ABS sector that will see the most significant growth, according to some market players, certainly due to changes in the Higher Education Act and rising tuition costs around the country. Congress rolled back the single-holder rule for consolidated loans, allowing borrowers to shop around for the best interest rates for their loans. Also, changes to the Higher Education Act extended the PLUS program to graduate and professional students, allowing them to borrow up to the full cost of their educations.