“The Miller-McKeon legislation is the first step in stabilizing the student loan program to ensure that students and families will continue to have access to their choice of student loans to pay for higher education.” – Lamar Alexander****
U.S. Senator Lamar Alexander (R-Tenn.) today released the following statement regarding the passage of H.R. 5715, the Ensuring Continued Access to Student Loans Act of 2008:
“We cannot afford to let college slip out of reach for this generation of students. Our economy and way of life depend on a well-trained and educated workforce,” Alexander said. “The Miller-McKeon legislation is the first step in stabilizing the loan program to ensure that students and families will continue to have access to their choice of student loans to pay for higher education. I look forward to working with my colleagues to address other ideas, such as authorizing the use of the Federal Financing Bank, to further strengthen the loan program so that students are not left without options for paying for college.”
Since February 18, 2008, almost 20 of the top 100 student lenders have stopped issuing federally guaranteed student loans. On April 16, Senator Alexander and the bipartisan Tennessee delegation sent a letter to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke asking that they use the authority of the Federal Financing Bank to serve as a temporary backstop for outstanding student loan-backed bonds in the auction rate market. Various legislative proposals are being considered that would explicitly give the Treasury Department the authority to use the Federal Financing Bank for this purpose. Until that legislation can be considered, H.R. 5715 will help stabilize the student loan marketplace and ensure that students and parents have access to student loans.
The bill would help end the student lending slump by:
• Giving the Secretary of Education the authority to purchase outstanding federal loans in order to provide lenders with the financial resources needed to make new loans to students for the upcoming school year.
• Improving students’ access to “Lender of Last Resort” loans when the student is unable to secure a loan in the marketplace.
• Raising federal loan limits for undergraduate students by $2,000.
• Making it easier for parents to take out low-cost federally subsidized loans on behalf of their children through the “PLUS” loan program.
• Helping students decrease their student loan debt levels by expanding access to the existing Academic Competitiveness Grants program. Under this bill, an additional 100,000 students can receive up to $4,000 more a year in grant aid.
H.R. 5715 bill passed the Senate today by unanimous consent. A different version of H.R. 5715 passed the U.S. House of Representatives on April 17, and the House must pass the bill as modified by the Senate before sending it to the President for his signature.