Extending the Ensuring Continued Access to Student Loans Act of 2008 (H.R. 6889)

In April 2008, Congress enacted the Ensuring Continued Access to Student Loans Act of 2008, to protect families’ access to federal students loans from turmoil in the nation’s credit markets. The law provides new protections, in addition to those in current law, to ensure that students and families could continue to have access to all the federal loans they were eligible for – and at no cost to taxpayers. As recent news reports have documented, in the months since the law’s enactment, no student or college has reported any problems accessing federal student aid for the current school year. However with conditions in the U.S. economy and credit markets still turbulent, and families already beginning to make financial planning decisions for next school year, it is only prudent for the federal government to take further action to ensure that students can continue to have timely, uninterrupted access to loans. H.R. 6889, which was passed by the House on September 15, 2008 by a vote of 368-4, would simply extend, for one year, certain provisions of the law that provide the U.S. Secretary of Education with additional tools to safeguard access to federal student loans. These provisions were set to expire by July 1, 2009; H.R. 6889 would extend them through July 1, 2010.

H.R. 6889 would:

• Extend the authority to allow guaranty agencies to carry out the functions of lender of last resort on a school-wide basis.
   
• Extend the Secretary’s authority to purchase loans from lenders in the federal guaranteed loan program, if there was a determination that lenders and other existing policy options were unable to meet the demand for loans. This would ensure that lenders continue to have access to capital to originate new loans. The Education Department would only be authorized to purchase loans in such a manner that would carry no cost for the federal government.