June 20, 2008

Lenders Say Department's Threshold for 'Last Resort' Relief Is Too High

By Paul Basken

Washington

The U.S. Department of Education, setting terms for the "lender of last resort" provisions in its student-loan rescue plan, has decided that colleges will be eligible for institutionwide relief only if at least 80 percent of their expected borrowers can't find a lender.

The terms, set out in a letter on Thursday from Vincent T. Sampson, deputy assistant secretary for postsecondary education, met immediate protest from groups representing lenders, which complained that such a

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