President Bush Signs Legislation That Boosts Availability of Student Loans

Student Loan Girl — Thu, 08 May 2008 16:15:00 GMT

On May 7, President George Bush signed into law legislation intended to help stabilize the $85-billion student loan industry and to avert a predicted shortage in student loans.

The law will allow the U.S. Department of Education to buy bundled student loans that lenders have been unable to sell to investors. Sales of these loans will create capital to help lenders make new loans.

In addition, the measure will allow the Education Department to loan federal money to guarantee agencies, so those agencies can issue student loans, if necessary, under the “lender of last resort” system,” according to an article in The Chronicle of Higher Education (“Bush Signs Student-Loan Bailout Bill Into Law,” May 7, 2008).

The new law is expected to simplify that system, under which students who have been denied student loans can petition the government as a last resort, by allowing the Secretary of Education to designate an emergency lender for an entire school instead of on a student-by-student basis.

Rep. George Miller, D-Calif., chairman of the House education committee and a chief backer of the legislation, said the passage of the bill should send a strong message to the public (“Bush Signs Student Loan Market Stabilization Plan,” Reuters, May 7, 2008).

“With this bill signed into law,” Miller said, “students and families now have every assurance that they will continue to have access to all the federal student loans they are eligible for, no matter what happens in the nation’s financial markets.”

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Congress Joins States and Colleges in Efforts to Reduce Soaring Textbook Costs

Student Loan Girl — Mon, 03 Mar 2008 07:09:00 GMT

With the average college student now shelling out between $900 and $1,000 each year for textbooks and supplies, according to the College Board’s latest Trends in College Pricing report, schools, states, and now Congress are getting involved in the crusade to control the spiraling costs of college textbooks.

Propelled by studies that show the prices of textbooks are rising faster than the rate of inflation, the House of Representatives included provisions in the recently approved College Opportunity and Affordability Act that are specifically targeted at making textbook costs more manageable, reports Elia Powers of Inside Higher Ed (“Different Tacks on Textbook Choice,” Feb. 19, 2008).

The House bill (H.R. 4137), which passed the House on February 7 and renews the Higher Education Act, would have colleges provide advance information in their course schedules about required books to give students time to plan for expenses and comparison-shop for the most cost-effective options.

Also approved by the House was an amendment (H.AMDT.951) proposed by Rep. Tim Ryan of Ohio that would create a pilot competitive grant program to assist a select number of colleges in setting up textbook rental programs.

States Enacting Their Own Textbook Legislation

H.R. 4137 would also require textbook publishers to provide more information about pricing and changes from previous editions, which follows bills already passed by some state legislatures, writes Powers.

Last April, for example, Washington state House Bill 2300 was signed into law, requiring textbook publishers to disclose retail prices and a history of revisions from edition to edition when presenting any materials to faculty.

In June, Oregon passed its similar Senate Bill 365 into law. In addition to charging publishers with providing retail prices and a list of all previous versions of a text to potential adopters, the Oregon measure requires publishers of textbook “bundles” (textbooks packaged with an accompanying CD-ROM or study guide, for instance) to make each component of the bundle available to students separately and to disclose the retail price of each piece.

In California, Assembly Bill 1548, known as the College Textbook Transparency Act, likewise calls for publishers to provide a list of revisions made to new editions, as well as for college bookstores to release the wholesale prices of textbooks. The California bill was signed by Gov. Arnold Schwarzenegger in October and goes into effect in 2010.

Changes at the College Level

In response to the increasingly vocal concerns of students, families, and legislators, not all schools are waiting on Congress or state officials to adopt changes to textbook pricing and marketing practices. Some schools, writes Powers, have already instituted book rental, buyback, or other programs in a move to extend textbook affordability.

At Rio Salado College in Arizona, for example, a partnership with Pearson Custom Publishing allows professors to “build” custom textbooks, drawing material from multiple sources. Administrators believe this program could save students up to 50 percent on reading materials.

The University of Virginia, in addition to expanding its textbook rental and guaranteed buyback programs, is increasing its selection of e-books, which can save students as much as 30 percent over print versions of new editions. And a growing number of U.Va. professors are choosing to purchase older editions of books in cases where the new material isn’t a necessity, a move the university says cuts an average of 75 percent off new book prices.

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Student Loan Blog : George Miller

President Bush Signs Legislation That Boosts Availability of Student Loans

Congress Joins States and Colleges in Efforts to Reduce Soaring Textbook Costs