As expected, President Bush signed into law the Ensuring Continued Access to Student Loans Act of 2008. After receiving bipartisan support from the House and the Senate, the bill aimed at ensuring student loan availability was approved by the president.
Worried that the departure of student lenders from the FFEL Program could make student loans more difficult to obtain, legislators hurried to secure a backup plan. According to House Representative George Miller, “The bill carries no new cost for taxpayers.”
The Ensuring Continued Access to Student Loans Act of 2008 indicates that:
o The limit on federal loans will soon increase. Students will be able to borrow $2,000 more to cover tuition and other costs.
o Parents will have more time to save for PLUS Loans. Rather than having to pay as soon as money is disbursed, they will have until six months after the child graduates before initial payments are due.
o Families slightly behind on their mortgages or medical bills may still be eligible for PLUS Loans.
o The Secretary of Education has the authority to advance federal funds to student lenders and guaranty agencies acting as lenders of last resort if the lenders run out of capital.
o Shall a lender of last resort plan be put into practice, guaranty agencies acting as lenders will have to abide by rules and restrictions similar to those governing FFEL lenders.
o Congress may call on the Federal Financing Bank to consider injecting money into the student loan market at no cost to the taxpayers.