April 29 (Bloomberg) -- President George W. Bush said Congress should back legislation that would give the federal government more authority to buy student loans from banks and other private companies.
``The recent credit crunch makes it uncertain that some students will be able to get the loans they need,'' Bush said at a White House press conference. ``Congress needs to pass a bill that would temporarily give the government greater authority to buy federal student loans.''
More than 50 lenders, accounting for 14 percent of the private student loan volume, have withdrawn from the guaranteed student-loan program. The companies cite increased borrowing costs, cuts in government subsidies for education loans and a lack of investor interest in securities backed by loans.
About 7 million borrowers will need more than $68 billion in federal loans this academic year, according to Education Department estimates.
Bush has said he supports a bill that has passed the House of Representatives that would safeguard student loans without permanently expanding the government's role in their financing. The authority granted by the bill is temporary, and would be used only because of a shortage of loans for students, he said.
The Senate version of the bill has yet to come under consideration.
