The State of Michigan, in the latest sign of turmoil in the student lending industry, is ending a program for offering private student loans.

The state-run Michigan Higher Education Student Loan Authority has posted a notice on its Web site saying it will no longer offer the Michigan Alternative Student Loan, or MI-Loan, program because of “the current and unprecedented capital-markets disruption.”

The Michigan statement refers to the meltdown in the American mortgage industry, which has made investors reluctant to buy debt, including that generated by student lenders. The Wall Street Journal quoted one trading executive today as saying about half of the $20-billion in security assets offered for auction yesterday failed to find buyers.

Student-loan-industry officials have been warning of a crisis in lending following the combination of two events in recent months: the rise in mortgage defaults, and the decision last September by Congress to cut the federal subsidy rates paid to student lenders.

Student-loan agencies in Mississippi and Montana are also among those having trouble finding investors willing to purchase shares of their debt, the Journal reported. At the same time, at least one major student lender is seeing an opportunity: JPMorgan Chase & Company announced it would cut rates and fees on both its federally guaranteed and its private loan offerings. —Paul Basken