Key Policy Letters Signed by the Education Secretary or Deputy Secretary
February 27, 2008
Archived Information

February 27, 2008

Dear President:

Recent volatility in credit markets has raised concerns about the continued availability of student loans. I want you to know that the United States Department of Education, in conjunction with other federal agencies, is closely monitoring the situation and continues to assess how broader market conditions may impact the student loan market.

I want to reassure you that federal financial aid - grants, loans through both the Federal Family Education Loan (FFEL) and Direct Loan Programs, and work-study - will continue to be available to your students and their families. There are more than 2,000 lenders that originate loans in the FFEL Program. While a few lenders have chosen or may choose to reevaluate their continued participation in this program, we expect other lenders will actively compete for this loan volume and ensure that a competitive, efficient, and comprehensive FFEL Program continues to provide a variety of lending options, foster innovation, and improve customer service.

Thus far, we have not encountered any situation in which eligible students have been unable to obtain federal student loans. To assist the Department with its monitoring of the situation, I have asked my staff to contact your financial aid administrator in the coming days and inquire about any lenders that plan to reduce, suspend, or discontinue making student loans to students at your institution.

It's our goal to ensure that all students and parents have continued access to federal student aid. We appreciate your assistance in our efforts to monitor the current student loan situation as it impacts your institution.

  Margaret Spellings

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Last Modified: 03/03/2008