Federal student loan plan helps Sallie Mae

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The Bush administration is preparing to buy up student loans, giving a boost to the struggling student loan market, including Reston-based Sallie Mae.

Buying up loans would help ensure that lenders have access to capital. The U.S. Department of Education announced yesterday it would implement a two-step program to stabilize the market.

The news followed Sallie Mae’s warning that there was a potential shortage of loans because of the subprime mortgage crisis.

The department’s plan includes buying unsecuritized debt for loans during the 2008-2009 academic year. The department will also buy into temporary trusts to provide more short-term liquidity for student lenders.

Congress passed legislation earlier this month directing the federal government to develop a plan to stabilize the student loan market.

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