Spellings Assures Student Loans Will be Available

In spite of the faltering economy and growing stress on the credit industry, federal student loans and student aid will remain available, according to Secretary of Education Margaret Spellings.

In testimony before the House Committee on Education and Labor, Secy. Spellings told lawmakers that the Department of Education had yet to see any negative effects on student loans as a result of problems in the private lending sector. "Federal loans and other federal aid comprise one piece of this sector," Spellings said in her testimony. "Of eighteen million college students, more than ten million receive financial aid from my Department."

Spellings' testimony was requested by Congress after reports surfaced that some of the nation's more than 2,000 private lenders for the Federal Family Education Loan (FFEL) program, which includes the Stafford Student Loan, had stopped originating new loans. Spellings assured lawmakers that the actual number of these lenders was very small, and that new lenders were stepping in to meet the needs of students and families.

"My Department is in regular contact with schools," said Secy. Spellings. "In our extensive outreach, no institutions have notified us that any eligible student has been denied access to federal loans."

Spellings assured lawmakers that her agency was monitoring the credit situation daily and had prepared an extensive set of contingencies for dealing with any situation that might threaten the availability of student loans for all qualified applicants.

Also See:
Student Loan and Aid Primer
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