Uncle Sam the Student Loan Man

The San Francisco Chronicle reports:

Education Secretary Margaret Spellings is seeking to ease worries that tight credit markets might make it hard for students to get college loans.

Spellings said in an interview Friday that her department had reviewed the law and concluded that it has the authority to quickly free up money from the U.S. Treasury, if needed, to finance student loans.

She said the money would be provided so that guarantee agencies - nonprofits that traditionally back student loans issued by banks - can offer loans directly in a pinch.

Spellings said she was clarifying her authority to do that because there had been confusion about whether she would first have to go to Congress and seek legislative action before going to the Treasury. That could be time consuming, and legislative politics could cause further delay.

Lawmakers, students and financial experts are worried that the nation's ongoing credit crunch may make it more difficult for students and their families to find loans. Nearly two dozen lenders have dropped out of the federally backed student loan program.

There's no limit to Uncle Sam's generosity with taxpayer money.