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McNerney Backs Effort to Ensure Access to Federal College Loans

Apr 17, 2008
Press Release

April 18, 2008

Washington, D.C. – Today, Congressman Jerry McNerney (CA-11) voted to ensure that students and families who need federal loans to pay for college will continue to be able to access them, despite turmoil in U.S. financial markets.

The Ensuring Continued Access to Federal Student Loans Act of 2008, H.R. 5715, which carries no new cost for taxpayers, was passed by a vote of 383-27, a large bipartisan majority.

“The ticket to ensuring our nation’s economic leadership in the world is having an educated workforce,” said Rep. McNerney.  “So many families here in Northern California and across the country rely on federal loans to help finance a college education.  In order to keep a college education in reach, we have to make sure families can borrow the money they need.”

H.R. 5715 would provide new protections to ensure that families have timely, uninterrupted access to federal college loans in the event that stress in the credit markets leads a significant number of lenders to substantially reduce their activity in the federally guaranteed student loan program.  

Specifically, the Ensuring Continued Access to Federal Student Loans Act of 2008 would:

  • Increase the annual loan limits on federal college loans by $2,000 for undergraduate students, and by increasing the aggregate (the total loan limit over the course of a student’s education) loan limits to $31,000 for dependent undergraduates and $57,500 for independent undergraduates, reduce borrowers’ reliance on costlier private college loans;
  • Give parent borrowers more time to begin paying off their federal PLUS loans by providing them with the option to defer repayment until up to six months after their children leave school – giving families more flexibility in hard economic times; and
  • Give the U.S. Education Secretary the temporary authority to purchase loans from lenders in the federal guaranteed loan program, ensuring that lenders continue to have access to capital to originate new loans.  The Education Department would be authorized to purchase loans only if doing so would not result in a net cost for the federal government.