Ellison Supports Continued Access to Federal Student Loans for Minnesota Families
Congressman Keith Ellison (D-Minneapolis) voted this week to enact legislation protecting students and their families from the tumultuous U.S. financial market when they seek federal student loans to pay for their college education. The Ensuring Continued Access to Federal Student Loans Act of 2008 (H.R. 5715) passed by a vote of 383-27.
"This bill will provide much needed security, and relief for countless hard working families in the Fifth District of Minnesota and across America to students who are looking to pursue a higher education," Congressman Ellison stated.
H.R. 5715 gives additional assurances to those already in place that will guarantee families have access to these federal student loans regardless of whether or not the lenders begin to reduce financial support for the program due to market instability. In addition, this Act will pass on no additional burden to American taxpayers.
The most recent survey of Minnesota federal student loan data (2005) compiled by the Minnesota Office of Higher Education showed that 49% of Minnesota undergraduates received student loans to pay for college, totaling $949 million dollars. Most of the individual loans averaged around $20,000.
"Minnesota families rely heavily on these loans to supplement the rising costs for college education. Student loans are vital if we wish to honor our commitment to the next generation by affording them the opportunity of higher education for everyone," Rep. Ellison said.
H.R. 5715 would:
* Reduce borrowers' reliance on costlier private college loans by increasing the annual loan limits on federal college loans by $2,000 for undergraduate students, and by increasing the aggregate (the total loan limit over the course of a student's education) loan limits to $31,000 for dependent undergraduates and $57,500 for independent undergraduates;
* Give parent borrowers more time to begin paying off their federal PLUS loans by providing them with the option to defer repayment until up to six months after their children leave school - giving families more flexibility in hard economic times.
* Help struggling homeowners pay for college by making sure that short-term delinquencies in mortgage payments don't prohibit otherwise eligible parents from being able to borrow parent PLUS loans. Under current law, parents with an adverse credit history are ineligible to receive a parent PLUS loan, except under extenuating circumstances. The legislation would temporarily classify as an extenuating circumstance delinquencies on home mortgages of up to 180 days, therefore making it possible for parents who are being strained by the current housing market to secure loans for their children;
* Clarify that existing law gives the U.S. Education Secretary the authority to advance federal funds to guaranty agencies in the event that they do not have sufficient capital to originate new loans, and allow guaranty agencies to carry out the functions of lender of last resort on a school-wide basis. Under the Higher Education Act, these guaranty agencies are obligated to serve as a nationwide network of lenders of last resort if requested to do so by the Education Secretary; and
* Give the U.S. Education Secretary the temporary authority to purchase loans from lenders in the federal guaranteed loan program, ensuring that lenders continue to have access to capital to originate new loans. The Education Department would be authorized to purchase loans only if doing so would not result in a net cost for the federal government.
"Education is the great equalizer in America. Here in Minnesota, our educational system was once known as the Minnesota Miracle. We, as lawmakers, should do everything we possibly can to restore our educational system to those standards of excellence. This bill is a step in that direction. Certainly, if we wish to maintain our technical and scientific standing in the world, we must ensure students who wish to further their education are able to do so," Ellison concluded.