Education Department Announces Steps to Shore Up Student Lending

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.