The mortgage and credit crisis may have landed one more unexpected casualty: college students. The Financial Times reports that “A rising number of private and public lenders have been backing out of offering student loans, hit by the fallout from the credit squeeze and the declining profitability of federally-insured education loans.” Adding to this problem, “The effect of the squeeze in student loans is likely to hit those with poor credit scores and low incomes. Plus loans (made only to parents with decent credit histories), which provide the most comprehensive student financing, require credit checks, including history of foreclosure.”

Warning signs have been visible for months. It’s long past time for the Department of Education to make sure that all students have access to student loans. It should expand the existing direct student loan program (which is also cheaper for taxpayers), work with states to establish lenders of last resort, and look at ways to help struggling students. However, Congress should resist the student loan industry’s cries for a bailout; the “industry” is already heavily subsidized.

Here’s a timeline of how this has unfolded:

Late January 2008

– Sallie Mae, the nation’s largest provider of student loans, states it will “no longer make private education loans to students who are higher credit risks, so-called subprime borrowers.” For-profit education companies, typically reliant on students’ access to private loans, feel the sting. A number of education stocks, including Hoffman Estates-based Career Education Corp., experienced big sell-offs on fears that the schools could see a decline in enrollment.

Early February 2008

– Auctions of securities tied to student loans conducted by Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Citigroup Inc. fail to generate investors’ interest, leaving roughly $3 billion of such securities in a sort of limbo. Read more

Our guest blogger is James Kvaal, Domestic Policy Advisor at the Center for American Progress Action Fund.

In Milwaukee yesterday morning, McCain campaign advisor Carly Fiorina described how –- as the former CEO of Hewlett Packard –- she parked profits overseas even though it negatively impacted the U.S. economy. Watch it:

American corporations can postpone U.S. taxes on foreign profits indefinitely by keeping profits overseas. Since U.S. taxes are effectively voluntary, it’s not surprising that few corporations choose to pay them.

While Fiorina was leading HP, the company aggressively exploited offshore tax planning. The company held more than $14 billion overseas in 2004, according to the Washington Post, reducing its tax rate from 35 percent to 12 percent. At the time, Fiorina was a prominent defender of the offshoring of American jobs –- or, as she called it, “right-shoring.”

Now she is advising Sen. John McCain, who has refused to support the elimination of incentives to invest overseas. He even voted against an amendment to require companies to pay taxes on money they earn from foreign-made products sold in the U.S.

The bottom line: While proposing $175 billion in corporate tax cuts, McCain would continue to allow CEOs focused on the bottom line to invest overseas, rather than at home. The result is lower wages and a higher share of the tax burden for American workers.