Crowley Says New, Better Student Law Is Passed, Urges Bush To Sign It
BY JOHN TOSCANO

Crowley noted that in recent months, turmoil in the U.S. credit markets has made it difficult for some lenders in the federally guaranteed student loan program to secure the capital needed to finance college loans.

Legislation that ensures college students throughout the U.S. will continue to have access to federal student loans regardless of bounces in the credit market has passed Congress and Congressmember Joseph Crowley has urged President Bush to pass it.

"Education is the key to personal success as well as the way to keep America globally competitive in the 21st century," said Crowley. "The federal government plays a key role in helping students pursue a college degree. Protecting student access to low interest loans will keep the U.S. on the cutting edge of science, math, technology and all fields."

Crowley, a member of the key House Ways and Means Committee said he is "proud to have supported this key legislation and I urge the President to quickly sign this bill into law and bring needed stability to the education loan market."

Crowley explained that the Ensuring Continued Access to Student Loans Act of 2008 would provide new protections for students, in addition to those in current laws, to ensure that families can continue to access the loans they need to pay for college.

The Elmhurst lawmaker noted that in recent months, turmoil in the U.S. credit markets has made it difficult for some lenders in the federally guaranteed student loan program to secure the capital needed to finance college loans.

This has led some lenders Crowley said, to scale back their lending activity. While no college or student has reported any problem accessing federal aid to date, "It is only prudent that contingency plans are in place that would provide students and families with continued, uninterrupted access to federal loans, regardless of what's happening in the credit markets," Crowley said.

The newly approved legislation awaiting Bush's signature would:

•Reduce borrower's reliance on costlier private college loans and encourage responsible borrowing.

•Give parent borrowers more time to begin paying off their federal PLUS college loans.

•Help struggling homeowners pay for college and

•Provide the U.S. Secretary of Education additional tools to safeguard access to student loans.

Crowley explained that, under the current law, undergraduate students can borrow $3,500 in unsubsidized federal loans during their first year in college; $4,500 in unsubsidized loans during their second year; and $5,500 in unsubsidized loans during their final two years. Over the course of their education, he said, dependent undergraduate students can currently borrow up to $23,000 in total federal student loans (both subsidized and unsubsidized) and independent undergraduates can borrow up to $46,000 in total loans.

The proposed new law, he said, would increase the annual loan limits (the total loan limit over the course of a student's education) to $31,000 for dependent undergraduates and to $57,500 for independent undergraduates.

As for giving parents more time to pay off federal PLUS college loans, Crowley said the current law says parent borrowers must begin repayment 60 days after disbursement of the loan. But under the new law, parents would have up to six months after their children leave school, giving families more flexibility in hard economic times.

Regarding the problem of helping struggling homeowners to pay for college, whereas under current law those with adverse credit histories are ineligible to receive a parent PLUS loan, the proposed new statute would temporarily classify as an "extenuating circumstance" delinquencies on home mortgages of up to 180 days, therefore making it possible for parents feeling strained by the current housing market to secure loans for their children.

The new law, if enacted, would also give the U.S. Secretary of Education the temporary authority to purchase loans from lenders in trouble or advance federal funds to lenders having problems.