Student Loans Surviving Financial Crisis

Wednesday, 15 October, 2008

Government efforts to ensure the availability of student loans during the current financial crisis are working well, according to Secretaries of Education and Treasury Spellings and Paulson.

Earlier this week, President Bush signed a bill extending funding for the Ensuring Continued Access to Student Loans Act, granting the Treasury Department temporary power to use federal funds to purchase student loans. Due largely to the federal loan purchase program, federal student lending for the 2008-2009 school year is now exceeding last year’s pace, according to Spellings and Paulson.

“Almost $51 billion of federally guaranteed loans have been originated for the current school year, up from approximately $45 billion for the same period last year,” the Secretaries stated in a press release. “We recognize that education is the foundation of a strong American workforce and we must not let challenges in our capital markets hinder our students' opportunities.”

The funding extension bill signed by President Bush will ensure the availability of federally-purchased student loans through the 2009-2010 school year.

“Using our newly extended authorities, the Administration is moving aggressively to support the continued availability of funding for federal student loans in the next school year with the goal of restoring the government guaranteed student loan market to normal operations,” stated Spellings and Paulson.

Source: http://www.usgovinfo.about.com