The cost of a college education continues to soar, and the interest rate on government-subsidized student loans is set to double. It would seem like a perfect recipe for more private lending and, by extension, for more securitization of private student loans, which has fallen sharply since the federal government took over this corner of the market two years ago.

In fact, the opposite appears to be happening: the ranks of private student lenders continue to thin amid increasing regulatory scrutiny, and those that remain are tightening their lending criteria. So while these products have new features allowing them to better compete with government-subsidized loans, they are also available to fewer students.

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