Department Releases Terms And Conditions Of Loan Purchasing Agreements

Abstract: Last month the Department outlined terms and conditions under which it would purchase student loans from lenders to provide them additional liquidity to continue making FFELP loans. Yesterday, the Department came a step closer to codifying those terms and conditions by posting the notice that is to be published in an upcoming Federal Register. The Ensuring Continued Access to Student Loans Act (ECASLA) gives the Secretary of Education authority to offer temporary liquidity to FFELP lenders at prices that will encourage their continued participation in FFELP and maximize student loan availability. The law also requires that the Department provide that liquidity at no net cost to the federal government.

The full article was originally published in NASFAA’s Today’s News on 06/26/08.