Washington, D.C. – Students, parents and loan lenders can breathe a sigh of relief after the recent passage of a bill that ensures access to student loans for college.

What began as a problem within the mortgage market has threatened to disrupt the market that students and their parents rely on to obtain student loans. This bill is a necessary step to providing students access to the loans they need for college this fall, according to U.S. Senator Mike Enzi, R-Wyo., Ranking Member of the Health, Education, Labor and Pension (HELP) Committee. 

“The Secretary of Education can now take actions that will increase loan limits for students and provide parents with greater access to federally guaranteed loans. Both provisions will decrease reliance on private loans which cost more and are becoming less available,” said Enzi.

According to Enzi the bill will increase grant support for Pell-eligible students who take rigorous high school courses and major in science, technology, engineering, math and critical foreign languages.

“At a time when our economy needs more individuals with knowledge and skills in these areas, this bill provides low-income college students with the means to be successful in these high-need, high-reward fields,” said Enzi.

The bill, H.R. 5715, originated in the Health, Education, Labor and Pensions (HELP) Committee of which Enzi is the Ranking Member. Under the leadership and bipartisanship work of Enzi and Ted Kennedy, the HELP Chairman, the bill was introduced, negotiated with the House and the two bodies passed it this week.

The bill helps lenders be secure in the market and therefore ensuring students have access to loans from secure financial lenders from which they can borrow funds to pay for higher education.                        

The President is expected to sign the legislation.

More information on the specific amendments in the bill is below.
 
Summary of Senate Amendments to the
Ensuring Continued Access to Student Loans Act of 2008

Improving access to PLUS Loans for parents struck by the current mortgage crisis:

The Senate amendments—

• Ensure parents struck by the current mortgage crisis can still access PLUS loans by clarifying the time period during which a delinquency on a mortgage payment will not disqualify a parent from accessing a PLUS loan.

Shoring up the current “lender of last resort” program and allowing the Secretary to designate entire institutions as “lender of last resort” schools:

The Senate amendments—

• Ensure loans made through the “lender of last resort” program are made with similar terms and conditions as other FFEL loans.
• Sunset the Secretary’s authority to designate entire institutions for the “lender of last resort” program at the end of the 2008-2009 school year.
• Ensure that guaranty agencies and lenders operating under the “lender of last resort” program are subject to the same ethics rules with respect to providing incentives to schools to participate as other FFEL lenders.
• Guard against abuse in the lender-of-last-resort program by requiring guaranty agencies and lenders acting as lenders-of-last-resort to report on loans made through such program.
• Protect taxpayers by requiring reporting on the costs of the lender-of-last-resort program as compared to the current loan programs.

Ensuring these changes can be implemented in time to make a difference:

The Senate amendments—

• Ensure the steps Congress is taking to ensure access to loans can be implemented in time to make a difference, by suspending the Master Calendar requirements and negotiated rule-making process for the loan changes in the bill.

Supporting low-income students and reducing their reliance on student loans:

The Senate amendments—

• Support low-income students and reduce their reliance on student loans by directing all savings generated by the Act into ACG and SMART grants for low-income students.