NAICU Washington Update

Legislation on Secretary's Emergency Student Loan Authority Awaiting Signature

Congress acted with record speed to extend the Secretary of Education's authority to purchase federal student loans for an extra year. The bill, however, is still sitting on the president's desk.

The House approved the measure on September 15, and the Senate followed suit two days later. There is no indication the president won't sign the measure. He has until October 8 to do so.

The bill gives the Secretary the ability to ensure liquidity in the federal bank-based student loan program by either purchasing federal student loans outright, or by purchasing a temporary interest in them. Although the authority was initially extended to the Secretary just this past June, the Department quickly implemented the program - an action many see as helping prevent a student loan crisis this fall. A Department spokesman recently stated that $4.5 billion in loans have been provided through this authority. NAICU members were instrumental in helping get both bills enacted (see Week in Review, June 27, 2008).

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