Student loans could be going the way of the mortgage.

We've all heard for months that mortgages are getting harder to get — sometimes even by people whose credit score places them outside the realm of the subprime market. Now, college loans could start becoming more elusive.

So far, collegiate borrowers seem to have been sheltered from the nation's credit woes, but lawmakers are concerned that could change if the federal government — which recently helped bail Bear Stearns Cos. out of a cash crunch — doesn't lend its helping hand to student loan providers.
In the past 35 years, the Federal Family Education Loan Program, which offers loans that are mostly guaranteed by the government, has disbursed more than $350 billion to students.

It is the government's largest student aid program. During the 2004-2005 school year, about 78 percent of student loan disbursements — including the popular Stafford loans — fell under its umbrella.

But in recent months, 19 lenders have either bailed out on the initiative or suspended their lending activities, members of the House of Representatives said in a letter to Federal Reserve Chairman Ben Bernanke. South Texas reps. Ruben Hinojosa and Solomon Ortiz are among those who signed the letter.

With lawmakers saying those loans have become “uneconomical and unprofitable,” the lenders' positions are understandable.

The timing is less than stellar. About 6.7 million college students are expected to apply for those types of loans in the coming months.

“If students — 80 percent of whom rely on the Federal Family Education Loan Program — are unable to secure loans in the fall, we would not only severely impair their long-term earnings capacity, but we would also impair our nation's economic prospects,” lawmakers wrote.

College graduates in Texas on average walk the stage with just more than $18,300 in student debt, according to the Project on Student Debt, an initiative of a non-profit that aims to make college more affordable.

Among those who have pulled out of the federal lending program is the College Loan Corp., formerly the nation's No. 8 source of federal college loans. It now plans to shift its business focus to the private student loan market. Part of the College Loan Corp.'s decision: More than $20 billion in budget cuts Congress in 2007 approved making to the Federal Family Education Loan Program over the next five years.

The cuts were intended to increase funding for Pell grants and to lower student-loan interest rates.

It is a nice gesture, but one that seems to benefit some borrowers at the expense of others. With Stafford loans being more popular and more accessible, funding the Federal Family Education Loan Program should be priority No. 1.