Visible strides were made in student loan securitization in 1994. And while the long-term outlook remains highly uncertain, it is possible that the market could grow appreciably in the next few years.

According to Securities Data Co., $2.35 billion of student loans were securitized last year. The sum equals about 10% of the roughly $22 billion of student loans originated in 1994, according to Sanford C. Bernstein & Co.

Columbus, Ohio-based Banc One Corp. accounted for $1.2 billion of the total, and Cleveland-based Keycorp supplied $548 million.

According to well-placed banking sources, last year's securitization initiatives were partly defensive in nature.

In 1993, Congress cut the profitability of federally backed student loans, sweeping aside intermediaries such as banks, the government- sponsored Student Loan Marketing Association (Sallie Mae), and the Student Loan Corp.

With the Department of Education's move into direct lending, student loan providers were looking for a way to get out of the business and securitization provided an exit.

A further boost to student loan securitization could come from Sallie Mae. Facing a diminishing role in student loans, it could attempt to sever governmental ties and pursue new markets under a private charter. The agency would need to boost its capital ratios sharply to do this, and securitization of existing student loan assets could aid that effort strongly.

The newly ascendant Republican majority in Congress may change the picture, however. Rep. William F. Goodling, chairman of the House Economic and Educational Opportunities Committee, will propose legislation that would retard the growth of the federal government's new direct lending program for student loans.

It is unclear whether Rep. Goodling will succeed. If he does, major student loan intermediaries such as Banc One, Sallie Mae, and Student Loan Corp. will gain breathing room.

But student loan securitization may gain momentum anyway.

Long the only major entities to which a student loan could be sold, Sallie Mae and Student Loan Corp. until recently appeared to have a duopolistic hold on the loan purchase market. But last year's major securitization deals by banks opened a new conduit for players wishing to originate and then sell student loan assets.

Banks will want to preserve this newfound avenue. And Rep. Goodling's prospective bill notwithstanding, Sallie Mae won't rule out its own eventual participation in the securitization market.

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