Student Loans and Congress

April 20, 2008

As the housing market continues its down slide other sectors of the economy are beginning to feel the pinch. Financial Aid for college has been in trouble for quite some time. As tuitions rise and grants and scholarships become scarcer and scarcer more college bound students look towards loans to help pay for college.

Parents are just not making enough to put their children through college even if they were to take out a mortgage or refinance. Students with jobs can not find work that will even begin to cover book costs so it is becoming necessary to turn to other alternatives. While Student Loans are certainly not something new the current financial crisis is.

A recent report show that Congress is struggling to make certain that there is enough funding for Student Loans. Many lenders of Student Loans are even finding it difficult to make ends meet as it were since they are finding that it is almost impossible to sell off loans.

The U.S Department of Education is expected to get approval that will allow them to buy student loans that are guaranteed by the Federal Government from lenders who can not sell the loans anywhere else. The bill containing this provision among others is expected to be approved by a congressional committee. Among other provisions the bill will gather more federal loan money for students and will even ease payment terms which will be of great help to students.

As it stands now, federally guaranteed loans are preferred for students who may otherwise receive a loan due to poor credit history. Along with this benefit federally guaranteed loans usually have lower interest rates and easier terms for students.

Other bills in the works concerning student loans include one introduced by Democratic Senator Edward Kennedy, which will help to boost student grants.

“The turmoil in our nation’s financial markets has spread to the federal student loan program.” Stated Representative Howard McKeon.

The majority of college students depend on federal student loans as their primary method of paying for their education.

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