Dept. of Education Takes Steps to Ensure Students Continue to Have Access to Federal Student Aid

Access to higher education may no longer be a big problem to some as the U.S. Department of Education started taking steps in ensuring that students can have an “uninterrupted and timely” access to federal student aid via the Federal Family Education Loan Program (FFELP) and the Direct Loan Program.

As credit markets for student loans continue to tighten, there is a growing concern among schools, students and lenders about the availability of funds for the 2009-10 academic year. With lenders currently committing loan volume to schools for the upcoming academic year, the Department of Education, in coordination with the Treasury Department and the Office of Management and Budget, is using the authority of the extended Ensuring Continued Access to Student Loans Act.

“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,” said Treasury Secretary Henry M. Paulson, Jr.

The Department of Education will replicate for the 2009-10 academic year the successful loan purchase and participation interest programs announced in May 2008 for the 2008-09 school year. To date, these programs have supported nearly 50 percent – or $8.7 billion – of the FFELP loans disbursed thus far this year.

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