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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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You are fully responsible for the content that you post. I'll be honest. If college students and their parents have a harder time getting loans, that's a good thing. Perhaps now more people will stop and consider the long-term implications of taking on so much of this so-called good debt to fund a college education.

The College Board likes to highlight in its annual survey of college costs that over a working lifetime, a college-educated person can earn considerably more than someone with just a high school diploma. But many of those college grads are now using an increasingly higher percentage of their incomes to pay down student loan debts -- for at least a decade after they've left school. Add at least another decade if the student attends a pricey, private college.

As college financial aid award letters arrive and you sit down with your child, consider the dilemmas faced by some of the people who wrote to me. South Carolina resident Brenda Nixon is having trouble paying back about $58,000 in undergraduate and graduate student loans.

Are there any programs that you know of to assist borrowers with student loans?" My forbearances and deferments have all been exhausted." As graduation season approaches, I'll get more questions like this one. That's when it hits people that they are struggling to pay back the thousands of dollars they borrowed. Many can't even handle the pint-size loan payments made possible by extending the loans out for as much as 30 years.

While there are some loan forgiveness programs, they're available generally for people such as teachers or doctors who are willing to work in underserved and low-income areas.

If you're a federal government employee, the Federal Student Loan Repayment Program allows agencies to make payments on certain workers' federally backed loans, up to $10,000 a year for a total maximum benefit of $60,000. To find out more, go to http: www.opm.gov oca pay studentloan. Of course there are catches to getting the cash. First, the agency has to set up the program. The federal employee has to sign a service agreement to stay with the agency for at least three years, and the loan repayment is taxable income.

If you volunteer for certain programs, a portion of your debt may be forgiven. Don"t just buy stuff. Do stuff. Roth or Traditional IRA? Which is right for you? Sell them today. Looking for a new job outside Washington DC? HSBC Direct: Earn 3.05%APY on your savings.

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Permit the Department of Education to serve as a "secondary market of last resort" that would buy loans from lenders in the Federal Family Education Loan, or guaranteed loan, program that have been otherwise unable to raise new funds. We have taken critical steps today toward ensuring that the credit crisis in the financial markets does not jeopardize our federal student loan programs," said Rep.

Rubn Hinojosa (D-Tex.) House Subcommittee on Higher Education, Lifelong Learning, and Competitiveness, who co-sponsored the bipartisan bill.

Not surprisingly, the passage of the bill earned applause from lenders and predictions that the legislation would "represent a significant boon to the for-profit post-secondary companies," as Trace Urdan, an analyst with Signal Hill, put it in an e-mail message Wednesday. But it also came in for some criticism from advocates for students. The U.S.

Public Interest Research Group and the United States Student Association sent a letter to members of Congress in which they generally praised the expanded flexibility for parent loans but expressed a mixed assessment of the expanded loan limits.

Extending credit to students, while doing nothing to ensure that the most predatory schools are restricted from siphoning it off, offers little help to the low-income students typically preyed upon by such schools. Any increase in loan limits without significant enhancements to. Doug Lederman Want it on paper? Know someone who’d be interested? Forward this story. Want to stay informed?

Advertisement Comments Truth is stranger than fiction The Minority Report (the movie) has correctly captured the new zeitgeist of higher education. While no student or college has reported any problems accessing federal student aid to date" (emphasis added)." No one has been hurt, but they "might" be. I think I have heard this refrain before.

Thank you Mr. Cuomo. We now have a new standard for action. An asteroid could fall on our heads. I think we need a program to destroy all asteroids before this happens. If I lose my job I could become poor, I think the taxpayers should give me ten million dollars to make sure this does not happen.

It has not happened, but it might.. Chimera, at 8:45 am EDT on April 10, 2008 House hearings on federal student loans Very informative article.. If what we’ve read is true, this could indeed impact funding prospects for the security auctions needed over the next quarter to fund student loans for the September crunch when school starts again.

I do hope these hearings will at least expose what deregulation hath wrought in this new global economy. We have a lot of MBA cowboys out there dreaming up crazy quilt, get-rich-quick lending schemes that end up blowing up into Bear Stearns spectacles. These schemes mutate into the public domain as teaser-rate mortgages given to folks with no income verification required.

Then, two years later, when folks can’t keep up with these ARM mortgages, they default. You should not have to graduate Wharton to understand how your mortgage works. Kudos to the Congress for these hearings. Let’s hope they wake people up. 9:05 am EDT on April 10, 2008 try getting a private education loan..

The credit crunch is very real and although Congress is trying to make sure the incompetent Spellings-led ED ensures FFELP and DL for students; and student who depends of private loans to supplement their education is in dire trouble.

However you feel about Cuomo’s effort to police the national tertiary education system from NY’s AG office is irrelevant to this situation. Derek, at 11:30 am EDT on April 10, 2008 Irrelevant?? Not a problem as I have a great credit score. It is those who do not who will have a problem. The credit crunch is very real and although Congress is trying to make sure the incompetent Spellings-led ED ensures FFELP and DL for students; and student who depends of private loans to supplement their education is in dire trouble."

I never said anything about the credit crunch, your conclusion is based on air. It is indeed real. We agree about the incompetence of Spellings et al. As far as students needing to supplement their education, it is the "supplementing" that is a part of the problem. If a poor student cannot get a private loan there are other alternatives, including transferring to a less expensive school. Again, not worried about rich students who are by far the major borowers of these loans.

However you feel about Cuomo"s effort to police the national tertiary education system from NY"s AG office is irrelevant to this situation." My comparisons had more to do witn my observation of the "new standard" i.e. Politicians with a solution looking for a problem frighten me, and they should frighten you too. My "feelings" about Cuomo are probably too complicated for you to understand, but are not the issue.

I may be a fool, but I know when I am be played for a fool. Get past you self serving attitude. Chimera, at 3:15 pm EDT on April 10, 2008 You Can Bet Your Sweet Bippy.. Not hot air. I just received my FAFSA statement saying that I was not eligible for aid - not even a loan.

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A new study released yesterday suggests that a majority of Canadian homeowners classify themselves as "smart spenders" even though more than three-quarters of those surveyed carry some type of non-mortgage debt that, on average, tops $29,000.

The Harris Decima report, commissioned by the Bank of Montreal, also shows that Torontonians are the most likely to mimic the American archetype of using their home as a piggy bank. About 55 per cent of homeowners in this city have a home equity line of credit secured against their house. A home equity line of credit is designed for people who have at least 20 per cent home equity, allowing them to borrow up to 80 per cent of the house's assessed value.

Lynne Kilpatrick, a senior executive vice-president at BMO, said a majority of homeowners reported feeling confident about carrying the cost of that debt because most use it for "prudent" expenditures such as home renovations. When you look at the survey results, the most disciplined, smart spenders are in Ontario," Kilpatrick said in an interview.

Nevertheless, the report suggests that while home equity lines of credit are frequently used, homeowners are also tapping other types of credit. People who have a HELC (home equity line of credit) are more likely to have higher debt loads of $90,000 or more," the study found. Three-quarters (72 per cent) of those who have debt between $90,000 and $150,000 have a HELC, as do 67 per cent of those who carry debt in excess of $150,000."

And while most Canadians "do their research" before making a major purchase, Calgary and Toronto homeowners appear to have a greater propensity "to purchase without looking for advice." The online poll was conducted between Feb. 15 and 26. Results are based on a sample of 1,875 homeowners, aged 35 to 65, who have at least 20 per cent home equity.

The findings come at a time when Canadian consumers continue to feel relatively insulated from America's economic troubles. A separate BMO report yesterday suggests while Americans piled up high debt and then cut spending as the housing market sagged, Canadian consumer confidence has remained relatively stable despite the deepening credit crunch. Deputy chief economist Douglas Porter said the optimism is being fuelled by low unemployment, rising wages, recent tax cuts and falling interest rates.

Consumer spending trends in Canada are showing some very real separation from the U.S., Porter said. While U.S. Canadian households still seem to see the economic damage as something unfolding in a far-off land." The credit crunch has also done little to stifle total household credit growth in this country, Porter said. And while he doesn't believe that consumers are overdoing it, he acknowledged the potential for risks. There are signs some consumers are more optimistic than others.

The Conference Board of Canada's February survey highlighted a decline in consumer confidence in Ontario because of the province's manufacturing-based woes. Those findings were echoed by a TNS Canadian Facts survey yesterday. It noted that "Ontario's vulnerability to a slowdown in the U.S.

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