[Congressional Record Volume 154, Number 57 (Thursday, April 10, 2008)]
[Senate]
[Pages S2949-S2950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY:
  S. 2847. A bill to amend the Federal Home Loan Bank Act to allow 
Federal home loan banks to invest surplus funds in student loan 
securities and make advances for student loan financing, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. KERRY. Mr. President, to many young people, from all walks of 
life, are either struggling to pay for college or flat out can't afford 
it. Those who aren't able to incur the steep costs of a college 
education are not only losing out on a degree, but setting themselves 
up to face a lifetime of lost opportunities, as study after study shows 
college graduates are the most attractive candidates for the fastest-
growing and best-paying jobs of tomorrow. Greater college access, 
gained through financial assistance, is critical to making the American 
dream a reality for all.
  Yet prospective student borrowers are about to encounter massive 
impediments to acquiring quality, affordable private loans. The credit 
crunch currently impacting the home mortgage sector is set to extend to 
the student loan marketplace. Without sufficient liquidity in the 
market, student borrowers will find it harder and harder to find loans 
for their costs of college next year. According to FinAid.org, student 
loan originators are increasingly choosing to exit or suspend their 
participation in all or part of the Federal Family Education Loan 
Program, FFELP--45 since last August alone.
  Unfortunately, however, Federal Reserve Chairman Ben S. Bemanke has 
indicated that the Federal Reserve is unlikely to take aggressive 
action at this time to help the student loan marketplace. Therefore, I 
am seeking to address this significant issue by introducing the 
Emergency Student Loan Market Liquidity Act.
  This legislation will temporarily amend the Federal Home Loan Bank 
Act to allow the Federal Home Loan Banks to invest surplus funds not 
needed for advances to its member banks for student loan-related 
securities. It would also allow the Federal Home Loan Banks to accept 
student loans and student loan-related securities as collateral. 
Finally, the bill authorizes each Federal Home loan Bank to provide 
secured advances to its members

[[Page S2950]]

to originate student loans or finance student loan-related activities. 
This will provide funds for banks to help provide critically-needed 
student loans during these difficult economic times.
  The Federal Home Loan Banks are today an essential source of stable, 
low-cost funds to financial institutions for home mortgage, small 
business, and rural and agricultural loans. With their members, the 
Federal Home Loan Banks represent one of the largest sources of home 
mortgage and community credit. There are twelve Federal Home Loan 
Banks, including one in Boston, each located in different regions of 
the country. Their cooperative structure is ideal for serving the 
system's 8,100 member lenders.
  Today, the Federal Home Loan Banks provide billions of dollars of 
primary liquidity to approximately 80 percent of the Nation's financial 
institutions. By providing this additional student loan authorization 
to its members, member institutions will be able to remain active in 
the student loan marketplace and help students pay for their education.
  This legislation is absolutely vital to securing the opportunity of 
higher education for all who choose to pursue it.

                          ____________________