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Low-cost student loans still available

October 21, 2008

President Bush has signed into law a measure that ensures low-cost student loans will remain available from The Student Loan People, Kentucky's only public, nonprofit student loan provider, through June 30, 2010.

"Providing low-cost student loans is critical in making higher education accessible for Kentucky students," said Gov. Steve Beshear. "With the passage of this legislation, The Student Loan People can continue to do its part to ensure economic prosperity for all of our citizens."

H.R. 6889 extends for one year the provisions of the Ensuring Continued Access to Student Loans Act (ECASLA), which Congress passed after the national credit crisis threatened the ability of states across the country to offer student loans this fall. The U.S. Department of Education's student loan liquidity program, created by the act, is temporary and was set to expire in September 2009 until passage of H.R. 6889.

"We are very pleased by the passage of H.R. 6889," said Edward J. Cunningham, Executive Director/CEO of The Student Loan People and Kentucky Higher Education Assistance Authority. "This legislation ensures that no Kentuckian will be denied the opportunity to pursue higher education and provides us the opportunity to continue working toward a permanent solution to the student loan liquidity crisis."

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In August, the Commonwealth of Kentucky provided critical bridge financing required to access the temporary federal solution in ECASLA. As a result, The Student Loan People were able to begin originating student loans as normal. Currently, participation interests in the loans are being sold to the U.S. Department of Education and the proceeds are being recycled into additional loans to meet the student loan demand in Kentucky.

The Student Loan People senior executives are seeking support for H.R. 5914, the Student Loan Access Act of 2008. The act would provide a permanent financing solution for Kentucky by giving nonprofit student loan lenders access to the Federal Financing Bank for funding student loans.

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