The newly-passed emergency legislation (H.R. 5715 “Ensuring Continued Access to Student Loans Act of 2008) has averted a crisis in the student loan industry, at least for the time being. Several large lenders, including Sallie Mae, have announced that they would stay in the program.
On May 21, the Treasury Secretary and Department of Education Secretary issued a letter outlining their plan to make sure students can access federal loans in the upcoming year. This plan includes: a commitment to purchase new loans from FFELP lenders at a price that will ensure they recoup their investment; a commitment to continue working with lenders to re-engage capital markets; strengthening the lender-of-last resort program; and increasing direct loan capacity.
The HEA reauthorization has taken an unexpected turn since the announcement of Senator Kennedy’s illness. The National Independent College and University Association (NAICU) stated that the bill “is shaping up as a reasonable compromise.”
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