The student loan ABS (SLABS) market's biggest challenges today are bubbling on Capitol Hill, where legislation that would shrink it has been thrown into limbo along with the healthcare bill, threatening the availability of student loans unless an emergency funding program is extended.

Short the 60 votes necessary to avoid a filibuster, the U.S. Senate version of the Student Aid and Fiscal Responsibility Act (SAFRA) has been slated to become part of the 2010 budget reconciliation bill since the House of Representatives passed its version last September. That version would eliminate the Federal Family Education Loan Program (FFELP), in which the federal government guarantees loans provided by private lenders such as Sallie Mae and the National Education Loan Network (Nelnet), and replace it with loans provided directly by the federal government.

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