Date: 2008-04-16
Speaker: LINCOLN DIAZ-BALART (republican)
Chamber: H
State: Florida

Madam Speaker. I would like to thank my friend. the gentlewoman from Florida for the time. and I yield myself such time as I may consume. Madam Speaker. weve all heard about how the housing crisis is really creating a credit crisis as well. And the credit crisis is not limited to the mortgage industry but is spreading to the many sectors of our economy. And one sector that the credit crisis has hit hard is the student loan industry. Companies that offer student loans are finding it difficult to have access to the capital needed to finance student loans. Theres over $340 billion in outstanding Federal and nonFederal student loans currently funded through capital markets with another $130 billion waiting in the pipeline to be funded by the markets. Because of the current conditions. a good portion of that $130 billion may never make it through the process. As a result of the credit situation. the difficulty in the credit market. 18 of the top 100 lenders have left the Federal Family Education Loan program. FFEL. while another 45 smaller lenders have suspended their participation or left the program. In total. those lenders account for about 12 percent of the total of Stafford and PLUS student loans. Another 11 lenders have left the nonFederal loan program. So what does that instability in the credit markets mean for students and parents? Less competition and choice and higher costs through increased interest rate� and reduction of repayment benefits and increased fees. So the Congress should not stand by and let the credit crisis have a detrimental effect on student loan programs. Those programs open the door of higher education to millions of students. And thats why Im very pleased that the Committee on Education and Labor has decided. in a bipartisan manner. to really try to prevent the credit market instability from producing a crisis in student loan programs. And the underlying legislation. called the Ensuring Continued Access to Student Loans Act of 2008. will help provide new protections and clarify those in current law that ensure students and families have continued access to Federal loans despite the challenges created by current conditions in the credit market. Specifically. legislation will increase adding loan limits for unsubsidized Stafford loans by $2.000 for each year of undergraduate and graduate school and increase aggregate limits accordingly. It also permits the Secretary of Education to give an entire institution the authority to become a lender of last resort. This will ensure all students and parents will be eligible to receive lenderoflastresort loans. The Secretary of Education will also be given temporary authority to negotiate with lenders to purchase new loans. thereby freeing up capital. I think its appropriate. and I am pleased to commend the chairman of the committee. Chairman MILLER. and also the ranking member. Mr. McKEON. who have worked in a bipartisan fashion. very diligently. on this very important issue. and they are to he commended. as is the committee generally. Although the Education and Labor Committee worked in a bipartisan manner to draft this important legislation. that bipartisan spirit did not make it past the doors of the Rules Committee. Yesterday. the majority in the Rules Committee hit a new record of 50 closed rules. They had the chance to offer an open rule today on the underlying legislation. but instead. by partyline vote. the majority voted against an open rule and also blocked a number of Republican amendments from being offered. including an amendment from the ranking member of the Education and Labor Committee. Mr. McKEON. So much for bipartisanship in the Rules Committee. At this time I reserve the balance of my time.