WASHINGTON - President Bush is expected to sign new legislation as early as today that will allow the Department of Education to temporarily purchase loans held by student loan lenders, a move that supporters of the legislation said would help mitigate a looming student lending crisis.

But market participants involved in financing the loans, which are issued through the Federal Family Education Loan program, said yesterday that there are still several remaining questions about how the department will purchase them, including whether it would issue standby purchase agreements to buy student loan bonds in the secondary market. Until those questions are answered, it is not clear how effective the legislation, which was quickly shepherded through Congress last week, will be at staving off a potential crisis, they said.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.