Gillibrand Votes to Make Sure Upstate Families Have Access to Student Loans

Press Release

Gillibrand Votes to Make Sure Upstate Families Have Access to Student Loans
Today, local Representative Kirsten Gillibrand voted for the Ensuring Continued Access to Federal Student Loans Act of 2008 [H.R. 5715], legislation that will mitigate any impact that turmoil in the U.S. financial markets may have on students and families when trying to access federal student loans. This bill carries no new cost for taxpayers.

"During this economic downturn, it is important that families are able to send their children to college and that adults have the financial resources to continue their education. This bill will keep more New Yorkers in low-interest, federally-backed loans, and deter them from going to a high-interest private loan, which can take longer to repay," Congresswoman Gillibrand said. "Access to college is critical for competing in the global economy, and this bill will help keep America the world's leader in education of young people."

Last year, Representative Gillibrand introduced the College Affordability Tax Relief Act [H.R. 3388], which would make up to $10,000 in college tuition and taxes tax deductible for middle class families.

H.R. 5715 would provide new protections to ensure that middle class families continuously have access to federal college loans in the event that the stress in the credit markets leads a significant number of lenders to substantially reduce their activity in the federally-guaranteed student loan program.

The Ensuring Continued Access to Federal Student Loans Act includes the following provision:

· Increase the annual loan limits on federal college loans by $2,000 for undergraduate students, and by increasing the total loan limit over the course of a student's education 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

· 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

· 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.

Source