Senate Votes to Expand Some Student Loans - washingtonpost.com

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Who's Blogging » Links to this article Associated Press Thursday, May 1, 2008; Page A16 The Senate unanimously approved legislation yesterday to ensure that tight credit markets don't impede students' ability to obtain college loans. This Story Time's Up on Multiple-Choice Test for College Preparing D.C. That should decrease student reliance on more expensive private loans.

Some students have had trouble obtaining those non-federal private loans because lenders have left the market in recent months as a result of the credit crunch. Dozens of lenders also have stopped providing loans under the federal program. Where that has happened, however, other lenders have stepped in or students have received support through a smaller program in which the Education Department lends directly to students.

Both the House and Senate bills attempt to make it easier for parents to take out federal education loans by allowing them to defer repayments until their children leave school. Both bills would give the Education Department the authority to buy up loans from student lenders to ensure that they have access to capital and can keep issuing loans. The Bush administration has called for such action, as have lenders.

The Senate bill also would increase grant aid to poor students, a provision not in the House legislation. Lawmakers say the next step is for House lawmakers to vote on the Senate version of the bill, so it can be sent to the president quickly. The Senate bill was introduced by Edward M. Millions of families are facing difficult economic challenges at every turn," he said. With this legislation, their children's college dreams won't become the next victims of today's troubled economy."

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