Posts Tagged ‘Congress’
Congress passes student lending bill
Source: CNBC.com
The House voted on 4/18/08 in favor of an college lending bill 383-27 after tensions mounting that the tightening credit markets, triggered from the subprime mortgage crisis, could limit financial aid for students.
Statistic: 13 percent of companies in the lending market have recently stopped making loans under the federal student loan program.
The legislation gives the Education Department the ability to buy loans from student lenders which in turn helps lenders have more cash available for lending.
The CEO of Sallie Mae warned of a “train wreck” coming in the $85 billion education financing market without urgent government intervention according to an article on MSNBC.
Chief Executive Al Lord told investors on a conference call Thursday, that a market hit by a credit crunch and cuts last year in federal subsidies to student lenders is cause for concern. Conveiently, his remarks about the the state of the college loan industry came hours ahead of an expected vote on the floor of the U.S. House of Representatives on a bill which could help bail out the lending institutions.
A statistic to note in the conference call from Mr. Lord:
Demand for student loans at Sallie was running at $3 billion a month, while the company has only been able to access funding of about $1 billion a month.
Source: http://www.msnbc.msn.com/id/24167304/