Government Seeks to Buy Student Loans

The Bush administration is proposing that Congress authorize it to buy billions of dollars in federal student loans to make sure the nation’s credit crunch does not block borrowing for higher education.

The proposal, outlined in a letter to be sent Wednesday to members of Congress from the Education and Treasury Departments and the Office of Management and Budget, endorses a provision in a bill passed by the House this month. It is the latest sign of deepening concern that the combination of tougher standards for borrowers, lender withdrawals from federal student loan programs and falling housing prices poses a threat to families struggling to cope with rising tuition. By buying loans, the government would provide capital to lenders to make new loans.

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~ by spyaokid on April 26, 2008.

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