Congress Asks Fed for Lifeline for Student Loans

Credit Union Journal, The, March, 2008 by Analysis Ed Roberts

Just as the Federal Reserve was moving to bail out the mortgage-backed securities market, a group of House members was calling on the Fed to pump liquidity into the student loan market to help avert a crisis.

The group called on Federal Reserve Chairman Ben Bernanke last week to provide liquidity to student loan originators, both bank and credit union lenders and non-bank lenders, in the same way the Fed is providing low-cost funds to mortgage lenders. “In these difficult times, we believe the Federal Reserve System should work to provide liquidity to all types of student loan originators in order to restore a smooth functioning of this market sector and to avoid negative economic outcomes,” said the lawmakers in a letter to the Fed Chairman.

The House members...