Congress has passed a bill that will protect college students who rely on student loans from the effects of the credit crunch.
The Department of Education will purchase student loans from lenders who are unable to meet demand because of the current problems in the private credit market. It will also ensure that lenders will have reliable access to capital to make new loans.
The bill, HR 6889, now goes to the White House for the president’s signature.
“We can't allow trouble in the credit markets to further price students out of a college degree," House Education & Labor Committee Chairman George Miller, a California Democrat, told the Associated Press.
The bill extends an act passed by Congress in May that assured students they would continue to have access to loans regardless of credit market conditions.
That act also increased limits on how much borrowers can receive in federally subsidized student loans, decreasing student reliance on more expensive private loans. It allows parents to defer loan payments until their children leave school.