Secretaries Speak Out, and Commit to the Future of Higher Education

In a coordinated effort to improve the future of our country, the Secretary of Education and the Secretary of Treasury have announced a plan that will make sure all students that would like to pursue postsecondary education have access to a federally funded loan to pay for school. A four-pronged approach will be made to allow the lenders formerly unable to afford federal loan programs access to the federal loan market.

This incredibly ambitious plan, as the Administration states, will be a relief to many lending institutions, as well as potential students. Continuing access to student loans has been a priority of the Administration; therefore Secretary Spellings and Secretary Paulson have spent a large amount of manpower and time devoted to developing this program. It is the answer to the prayers of many, and a clear investment in the future of the economy as a whole.

First on the agenda of the plan to retain access to loans is directly aimed at lending institutions. The Department has expressed its intention to purchase 2008-2009 loans, which will provide liquid assets to the original lenders. This will counterbalance the receding economy, and the decreasing market of borrowers. With the increased liquidity, the lenders will be able to participate in more of the programs offered by the Federal Government, and retain more clients than previously projected.

Second stage of the plan is also geared towards the lending community. The department has committed to coordinating the push to gain new capital markets, and make many students better deals when they are down to the last-resort lender.

The Direct Loan program will also be expanded, and a kind of “emergency” fund for students that apply later than the traditional set. Even the non-traditional students that may be in distance-learning programs that follow an independent learning schedule will be able to find funding. These degree plans do not follow the typical semester format, so often these students progress at a different pace than a campus-based program. Therefore the students will be applying for loans on a different timescale than others, but will not need to worry that they will not have access to federal loans.

Finally, the key component to the overall plan is that it will not be an added expense for taxpayers. Using current funding and assets, the Department of Education and the U.S. Treasury will invest in access to student loans, and in turn, in the future of our economy. Citizens with college degrees are the mainstay of the consumer economy, and need to continue to represent a large portion of our population. This plan is aimed towards this very fact.