What Is the Federal Family Education Loan Program?

Student loan-backed securities are securities backed by loans issued under the US Federal Home Education Loan Program. The government issues loans to students through private lenders. The decision to issue loans to students by private lenders is not based on the student's ability to repay, but is a government guarantee. If the loan defaults, the government guarantees 98% of the principal and interest payable. The major issuer of student loan-backed securities is Xue Li Mei (the largest student loan company in the United States). ^[1]