News Briefs
Bush administration clueless on student-lending crisis
Apr 24, 2008 6:16 PM
With sources of student lending drying up, even federal Education Secretary Margaret Spellings doesn’t know what the federal government can do beyond being “lender of last resort,” which under current law means underwriting private loans.
Spellings told the Chronicle of Higher Education after meeting with loan-industry officials that it was “unlikely” federal action would mean directly infusing dollars to private lenders. She added that she did not rule out either supporting Democrat-sponsored legislation moving through Congress that would aid loan companies and students or asking lawmakers to revisit last September’s $20-billion cut in lender subsidies.
Loan companies say the subsidy cuts are a leading reason behind their mass withdrawal from the government-backed student-loan program. They want colleges to have the authority to invoke institution-wide lender-of-last-resort provisions when even a single student at the college has difficulty finding a willing lender. Education Department officials say colleges don’t have that authority under existing law.
Chronicle of Higher Education, April 14
