WASHINGTON – Because of continuing concerns over access to student loans and stability in the student lending market, the U.S. Department of Education has announced that it is taking steps to ensure that students will be able to obtain federal student loans.
The department said it will duplicate for the 2009-10 academic year the loan purchase and participation programs that it undertook for the 2008-09 school year. The department said the Bush Administration will provide liquidity support to conforming Asset-Backed Commercial Paper conduits to purchase and provide longer-term financing for Federal Family Education Loan Programs. Loans in the conduit will be financed with new issues of Asset Backed Commercial Paper. The Education Department said it will support the effort by committing to purchase eligible student loans from the conduit in the future at a prearranged price.
There will be no net cost to taxpayers, according to the department.
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Treasury Secretary Henry M. Paulson, Jr., said in a written statement about the plan, "The unprecedented credit market conditions throughout the past several months have clearly impacted the student loan market. These necessary measures will allow for more liquidity in this market and should help to prevent the financial turmoil from hurting opportunities for our students."
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