President Bush signed a year-long extension (H.R. 6889) of the Ensuring Continued Access to Student Loans Act (ECASLA) into law on Tuesday. The extension will allow the Education Department to continue purchasing FFELP loans through June 30, 2010.

ECASLA originally allowed the Department to purchase FFELP loans first disbursed on or after Oct. 1, 2003, and before July 1, 2009. The new law extends the Department's authority to purchase loans first disbursed through July 1, 2010. The law also extends other provisions in ECASLA that would allow schools to be eligible for institution-wide lender-of-last resort designation through June 30, 2010.

The House and Senate easily passed the extension in September.

NASFAA President and CEO Dr. Phil Day had sent letters to education leaders in Congress urging swift passage of the provisions "that have been vital in helping students and parents secure federal student loans."

The Department's authority to purchase FFELP loans has helped insulate the student loan market from many of the troubles other credit markets are experiencing. It has provided some FFELP student loan providers with access to liquidity at a time when frozen credit markets are making it hard for banks and loan providers to raise enough money to meet borrower demand.

"With market turbulence showing no signs of letting up, it's only prudent to make sure that students have every assurance that the federal student loans they need will be there next year," said Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee.

Posted 10/08/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.