W.House backs much of House student loan bill
Posted by admin
WASHINGTON (Reuters) - The White House said on Wednesday it supports major provisions of a bill expected to come to a vote on Thursday in the House of Representatives that aims to stabilize the troubled student loan market.
“The administration is committed to ensuring that students and their parents have access to the federal student aid they need to pay for college this fall,” said the Bush administration in a statement.
The $85-billion student loan industry is in turmoil brought on largely by the mortgage market crisis. Concern has been growing in Congress about the availability of student loans this summer as many young people firm up their finances before heading to university in the autumn.
The industry also is still reeling from cuts made last year in subsidies paid to federally guaranteed student lenders, which followed months of scandal involving conflicts of interest and kickbacks among lenders and college officials.
Major student lenders include SLM Corp, Citigroup Inc, Bank of America Corp and JPMorgan Chase %26amp; Co.
The House bill would let the Department of Education buy federally guaranteed student loans from lenders unable to sell them on the paralyzed secondary market.
The Bush administration said the bill gives Education Secretary Margaret Spellings “the flexibility needed to ensure that this provision could be implemented effectively.”
The House legislation would also let the department funnel capital to state guaranty agencies that could then provide the loan money to colleges in need of funding for student loans. Continued…
Tags: aim, department of education, education, legislation, money, student loans