	Background

During the first several months of 2008, a number of lenders curtailed or ceased their participation in the Federal Family Education Loan (FFEL) program, citing reasons that include difficulties in raising capital through the securitization of student loan debt and reductions in lender subsidies enacted under the College Cost Reduction and Access Act of 2007 (CCRAA; P.L. 110-84 ). Concerns were raised that if lender participation in the FFEL program decreased substantially or if a substantial portion of lenders ceased lending to students who attend certain institutions of higher education, large numbers of students might face difficulty in obtaining FFEL program loans. Concerns were also raised about access to borrowing opportunities for students who have come to rely on private (non-federal) student loans because they have exhausted their eligibility for federal student loans. Legislation pertaining to federal student loans was active in the 110 th Congress. On October 27, 2007, the CCRAA was enacted, which made numerous changes to the federal student loan programs. Both bills would amend the HEA to address concerns about the continued availability of federal student loans. On May 7, H.R. 5715 was enacted as P.L. The ECASLA grants temporary authority to the Secretary of Education (the Secretary), until July 1, 2009, to purchase student loans previously made under the FFEL program. It also makes other changes to the FFEL, William D. Ford Federal Direct Loan (DL), and American Competitiveness Grant programs (discussed below). 110-315 ) was enacted to amend, extend, and establish new programs under the Higher Education Act. The HEOA includes several amendments to provisions that had been enacted under the ECASLA. Most recently, the temporary authority of the Secretary of Education to purchase FFEL program loans was extended through July 1, 2010, under P.L. 110-350 . Overview of the Federal Student Loan Programs

The federal government operates two major student loan programs: the FFEL program, authorized under Title IV, Part B of the Higher Education Act (HEA), and the DL program, authorized under Title IV, Part D of the HEA. Under the FFEL program, loan capital is provided by private lenders, and the federal government guarantees lenders against loss through borrower default, death, permanent disability, or, in limited instances, bankruptcy. Under the DL program, the federal government provides the loans to students and their families, using federal capital (i.e., funds from the U.S. Treasury). The Ensuring Continued Access to Student Loans Act of 2008 also expresses a sense of Congress that institutions such as the Federal Financing Bank, the Federal Reserve, and Federal Home Loan Banks, in consultation with the Secretaries of Education and the Treasury, should consider using available authorities to assist in ensuring continued access to federal student loans for students and their families; and that any action taken by these entities should not limit the Secretary's authority with regard to the LLR program, nor the Secretary's authority to purchase loans previously made under the FFEL program. P.L.
Federal student loans are made available under two major loan programs authorized under the Higher Education Act (HEA) of 1965, as amended: the Federal Family Education Loan (FFEL) program, authorized by Title IV, Part B, of the HEA; and the William D. Ford Federal Direct Loan (DL) program, authorized by Title IV, Part D, of the HEA. Under the FFEL program, private lenders make loans and the federal government guarantees lenders against loss due to borrower default, death, permanent disability, or, in limited instances, bankruptcy. Under the DL program, the federal government lends directly to students and their families, using federal capital (i.e., funds from the U.S. Treasury). The FFEL program is the successor program to the guaranteed student loan (GSL) program, originally enacted under Title IV, Part B, of the HEA. It is the older and larger of the two major federal student loan programs.
During the first several months of 2008, a number of FFEL program lenders curtailed or ceased their participation in the FFEL program, citing reasons that include difficulties in raising capital through the securitization of student loan debt and reductions in lender subsidies enacted under the College Cost Reduction and Access Act of 2007 (CCRAA; P.L. 110-84). Concerns were raised that if lender participation in the FFEL program decreased substantially or if a substantial portion of lenders ceased lending to students who attend certain institutions of higher education (IHEs), large numbers of students might face difficulty in obtaining FFEL program loans. In addition, concerns were raised about access to borrowing opportunities for students who have come to rely on private (non-federal) student loans because they had exhausted their eligibility for federal student loans.
Legislation pertaining to federal student loans was active in the 110th Congress. On October 27, 2007, the CCRAA was enacted, which made numerous changes to the federal student loan programs. On May 6, 2008, H.R. 5715, the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA; P.L. 110-227) was enacted to grant the Secretary of Education temporary authority, through July 1, 2009, to purchase student loans made under the FFEL program and to make other programmatic changes. On August 14, 2008, the HEA was amended and extended under the Higher Education Opportunity Act (HEOA; P.L. 110-315). The HEOA amended certain provisions that had been enacted under the ECASLA. The temporary authority of the Secretary of Education to purchase FFEL program loans was extended through July 1, 2010, under P.L. 110-350. The Secretary of Education has established several loan purchase programs under the authority granted by the ECASLA, as amended.
This report reviews changes to the federal student loan programs initiated under the ECASLA to address concerns about the continued availability of federal student loans. It will be updated as warranted.