AP
May 22, 2008
WASHINGTON - Student-loan companies, squeezed by the credit crisis, are getting some help from the federal government.
Education Secretary Margaret Spellings told the lenders - in a letter obtained by The Associated Press - that the government will purchase some of the loans, freeing up capital. That way, the companies will have more money to issue new loans.
"Many lenders today do not have access to funds at a cost that justifies originating new loans," Spellings wrote.
"Our plan is designed to provide viability in the marketplace for lenders who step up and make loans in this difficult environment."
