WASHINGTON, DC—The President today signed legislation ensuring that a steady supply of funding will be available to help college students pay their tuition bills at a time when a weakening economy has left many lenders unwilling to take risks. The Ensuring Continued Access to Student Loans Act of 2008 increases the amount of federally subsidized loans available to students and reduces the need for students to take out more expensive private loans.

"I am pleased that we were able to get the President to sign this bill, in light of his prior opposition to increased college aid. This critical legislation will help thousands of Rhode Island's students and their families save millions of dollars on their student loans," said Reed, a member of the Health, Education, Labor and Pensions (HELP) Committee, and an original cosponsor of the Senate version of the bill, which passed the Senate last week. "Rhode Islanders are being squeezed financially by the Bush economy. This legislation will help ensure that the credit crunch does not prevent deserving students from attending college. It is a smart investment in our children's future and getting our economy back on track."

In 2005-2006, over 82,000 federal loans were given to students attending Rhode Island institutions to help pay the cost of college tuition.

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

· Increase the amount of federally subsidized loans available to students in order to reduce students' reliance on higher cost non-federal private loans.

· Provide parents with improved access to low-cost federal loans (PLUS loans) as alternatives to private educational loans and home equity lines of credit by—

o Allowing for deferral of repayments on parent PLUS loans until the student graduates from school; and

o Ensuring parents who are impacted by the mortgage crisis can still qualify for PLUS loans.

· Ensure that students can access low-cost federal loans by stabilizing the private student loan program (FFEL program) by allowing the Department of Education to serve as the secondary market of last resort for loans originated in the FFEL program. Allowing lenders to sell outstanding loans to the Department will free up lender capital to make new loans for the upcoming school year and keep lenders from dropping out of the program.

· Ensure that students can access low-cost federal loans by shoring up the "lender of last resort" program already in law by—

o Allowing the Secretary of Education to advance capital to guaranty agencies to make these loans to students, if lenders won't; and

o Making it easier for students to get these loans by allowing the Secretary to designate entire schools as "lender of last resort schools," under limited circumstances where many students at a specific school are having trouble accessing loans (Senate bill sunsets this authority at the end of the 2008-2009 school year).

· Decrease students' reliance on loans to pay for college by using savings generated by the bill to expand eligibility for need-based aid. 100,000 more students will qualify for up to $4,000 per year in additional grant aid. This provision was added to the bill by the Senate amendment. In 2006-2007, 2,100 Rhode Island students received over $2.2 million in additional grant aid under these programs.