Late last week, bonds from two student loan lenders failed to attract bidders at auction. More surprising, these bonds were backed by government guaranteed loans - not credit-based private student loans. It seems that there is no differentiation of risk being done right now, and that is very troubling. While the credit markets will return to some level of function, it is unlikely that they will return to the way they were operating for private student loans. The rating and investor community is going to demand a greater amount of transparency from private student loan lenders. Lenders will have to assure the market that they have a solid understanding of the credit risk presented by their loan portfolios. And "Trust us" is no longer an adequate response - they will have to be far more transparent as to the underwriting guidelines and policies used to originate their loans. They will also have to show that they are able to consistently and uniformly apply those guidelines during the loan origination process, most likely in an automated fashion with robust credit decisioning systems in place.