Congress has approved through the 2010 school year a program that will allow students who rely on loans to continue their educations regardless of current difficulties in the private credit market.
The Senate on Wednesday passed the legislation by voice vote. The bill authorizes the secretary of education to buy loans from lenders in the federal guaranteed loan program when those lenders are unable to meet demand because of the credit crunch. It ensures that lenders will have reliable access to capital to make new loans.
The House passed the bill Tuesday, and it now goes to President Bush for his signature. The secretary’s current lending authority expires in July 2009.
“Our rough economy is already dealing a huge blow to American families and we can’t allow trouble in the credit markets to further price students out of a college degree,” House Education and Labor Committee Chairman George Miller, D-Calif., said Tuesday.
“With market turbulence showing no signs of letting up, it’s only prudent to make sure that students have every assurance that the federal student loans they need will be there next year.”
The bill extends an act passed by Congress in May that assured students they would continue to have access to loans regardless of credit market conditions.
That act also increased limits on how much borrowers can receive in federally subsidized student loans, decreasing student reliance on more expensive private loans. It allows parents to defer loan payments until their children leave school.
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