April 10, 2008 America’s largest not-for-profit guarantor of private student loans declared bankruptcy Monday night. The Education Resource Institute or “TERI” explained its decision to seek Chapter 11 bankruptcy by citing a sharp increase in the number of borrowers defaulting on their loans plus the troubled credit market. TERI currently has more than $17 billion in outstanding guarantees. How could TERI’s announcement impact you? For current borrowers, your loan will likely be unaffected. Future borrowers, however, may encounter problems. Here’s the rundown on some possible scenarios. How Guarantors Work When you are approved for a student loan, the bank or lending organization seeks a guarantor to repay the loan should you default on it. The guarantor co...