NASFAA President Dr. Phil Day wrote to leaders of the House and Senate banking committees yesterday to urge them to report legislation that puts "more tools in the Administration's toolbox to avert widespread student loan disruptions."

Day acknowledged Congress' quick action on H.R. 5715, which contains many helpful options the Administration can use, including Lender of Last Resort reforms and granting the Department of Education the authority to act as a secondary market. Despite this legislation, a significant number of schools are still having difficulties acquiring lenders for their borrowers.

"Fortunately, for many of them, the impact on their campuses has been slight," said Day. "Others, however, confront arduous challenges trying to line up lenders in this tight credit market. In far too many cases, my members have found it impossible to locate lenders that are willing to meet the Title IV loan credit needs at their schools."

Day asked committee members to reexamine providing liquidity through the Federal Financing Bank or the Federal Home Loan Banks, or giving legislative guidance to the Federal Reserve to take whatever appropriate actions that the Congress believes are necessary to overcome the current credit availability problem.

Regardless of the chosen course, Day urged Congressional leaders to move swiftly.

"The window for effective federal action that will ensure no shortage of loan capital for the fall is closing fast; we cannot place the educational goals of countless students in jeopardy," Day concluded. The full letter is available online.

By Justin Draeger
NASFAA Associate Director for Communications

Posted 05/20/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.