Washington, D.C. -— U.S. Rep. Bob Etheridge (D-Lillington) today voted for legislation that will ensure that families can continue to access affordable student loans during the current economic downturn.
The House voted to approve H.R. 5715, the Ensuring Continued Access to Student Loans Act of 2008, which would provide students and families with continued, uninterrupted access to federal loans.
“North Carolina families are being squeezed by sky rocketing gas prices, higher costs at the grocery store and rising college tuition,” said Etheridge. “With growing uncertainty about the economy, it is appropriate for Congress to take steps to ensure that students and their families continue to be able to access college loans.”
The legislation would take cautionary steps to ensure that the current turmoil in the U.S. credit market does not lead to students and families being unable to access loans. In recent months some lenders in the federally guaranteed student loan program have had difficulty securing the capital needed to finance college loans and have scaled back their lending activity.
The bill seeks to provide more access to federal unsubsidized loans and to reduce borrowers’ reliance on costlier private loans. The bill would increase the current annual loan limits on federal unsubsidized student loans by $2,000 for all students, and increase the aggregate loan limits to $31,000 for dependent undergraduates and to $57,500 for independent undergraduates. The current limits are $23,000 for dependents and $46,000 for independents.
The bill would also give parent borrowers more time to begin paying off their federal PLUS college loans. Currently parent borrowers must begin repayment within 60 days of the loan’s disbursement. H.R. 5175 would give parents the option to defer repayment until up to six months after their children leave school, giving families more flexibility in hard economic times.
The bill would help struggling homeowners to pay for college by altering a current law that prevents parents with an adverse credit history from receiving a parent PLUS loan. H.R. 5715 would provide an exception for parents who are strained by the current housing market and have delinquencies on home mortgages of up to 180 days.
Finally the bill would provide the U.S. Secretary of Education with additional tools to safeguard access to student loans. The bill provides the secretary with the authority to take action and advance federal funds if lenders cannot make new loans.