Despite recent assurances from Department of Education officials that students will have ample access to federal loans for the fall, three top banks have announced they have dropped out of the federal student loan program for the coming academic year (as reported in The Wall Street Journal via University Business).

The three banks–HSBC Bank USA, M&T Bank Corp, and TCF Financial Corp–rank among the fifty largest providers of federal student loans, lending a combined total of more than $560 million of the $119.2 billion made in loans in the 2006 fiscal year.

The reason?  The recent College Cost Reduction and Access Act slashed the federal subsidies paid to private lenders by a whopping $20 billion, making those student loans just not quite profitable enough to interest these particular financial institutions during turbulent economic times.

Will there be more banks dropping student loans in the months ahead?  I’m guessing so.

All the more reason to explore affordable ways to get an outstanding education!