Congressman Dave Loebsack joined a bipartisan majority in the U.S. House of Representatives to approve legislation to ensure that the turmoil in the U.S. financial markets does not keep students and families from accessing the federal student loans they need to pay for college. The Ensuring Continued Access to Federal Student Loans Act of 2008 (H.R. 5715), which carries no new cost for taxpayers, was passed by a vote of 383-27.

"During these uncertain economic times we must ensure Iowa students have reliable and expanded access to federal student loans to help defray the rising cost of college," said Congressman Loebsack. "By reducing a student’s reliance on more costly private loans and further encouraging responsible borrowing, this legislation makes college more accessible and provides students with the financial stability necessary to complete their educations regardless of the current economic climate."

In recent months, turmoil in the U.S. credit markets has made it difficult for some lenders in the federally guaranteed student loan program to secure the capital needed to finance college loans, leading some lenders to scale back their lending activity. While no student or college has reported any problems accessing federal student aid to date, Congressman Loebsack believes it is nonetheless prudent for the federal government to make sure that contingency plans are in place that would provide students and families with continued, uninterrupted access to federal loans, regardless of what’s happening in the credit markets.

The Ensuring Continued Access to Student Loans Act of 2008 (H.R. 5715) would provide new protections, in addition to those that already exist under current law, to ensure that families continue to have timely, uninterrupted access to federal college loans in the event that the stress in the credit markets leads a significant number of lenders to reduce substantially their activity in the federally guaranteed student loan program.

Specifically, the Ensuring Continued Access to Student Loans Act of 2008 would:

• Increase the annual loan limits on federal unsubsidized student loans by $2,000 for all students and increase the aggregate loan limits
• Reduce borrowers’ reliance on costlier private college loans and encourage responsible borrowing
• Give parent borrowers more time to begin paying off their federal PLUS college loans
• Provide the U.S. Secretary of Education additional tools to safeguard access to student loans

As a member of the House Education and Labor Committee, Congressman Loebsack has made it a priority to make college more affordable and accessible for Iowa students. Last year, the Congressman worked with his colleagues to pass and enact the College Cost Reduction and Access Act. This new law makes the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college, and doing so at no new cost to U.S. taxpayers. As a result, Iowa’s students and families will receive an additional $430.3 million over five years in additional benefits in the form of student loans and Pell Grants.