Borrowers in the auction-rate securities market, including many student-loan organizations, appear to be headed for a financial crunch, reports The Wall Street Journal. The Michigan Higher Education Student Loan Authority, a state agency, announced yesterday on its Web site that it would stop making loans under the state’s Michigan Alternative Student Loan program “due to the current and unprecedented capital-markets disruption.” More than 100 Michigan colleges and universities participate in the program.

According to the newspaper, the problem “could soon hit many other borrowers, ranging from California museums to the prestigious Deerfield Academy prep school in Massachusetts.”

Peter Warren, vice president of government relations for the Education Finance Council, which represents nonprofit lenders and state lending agencies, said that while Michigan may be the only state yet to announce a student-loan halt, others are “seriously evaluating” the viability of their programs.

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