Senate Passes Student Loan Stabilization Bill

WASHINGTON -- The U.S. Senate on Wednesday passed a bill aimed at stabilizing the $85-billion student loan industry by allowing the Education Department to intervene and inject liquidity into the market, Reuters reported.

The Senate unanimously passed a bill that was approved by the House of Representatives on April 17, Reuters reported.

The legislation would affect loan providers such as SLM Corp or Sallie Mae, Bank of America Corp, Citigroup, JPMorgan Chase & Co, Wachovia Corp and many others, Reuters reported.

Backed by the Bush administration, the bill would allow the Education Department to buy up federally guaranteed student loans that lenders are unable to sell as securitized debt, Reuters reported.

The bill would also allow the Education Department to funnel capital for loans to state guaranty agencies under a "lender of last resort" program -- not only for students, but for entire colleges that face loan shortages from other sources, Reuters reported.

-- NYSSCPA.org News Staff

Posted on 5/1/08