The recent article ("Three Large Lenders Out of FFEL," Aug. 13) paints an incomplete picture of the department's loan purchase programs and the current student loan market overall.

Jointly, the U.S. Departments of Education and the Treasury and the Office of Management and Budget have created and are executing two programs designed to provide near-immediate liquidity into the student loan market at no net cost to the tax payer. This effort was accomplished in a three-month period and with no authority to advance or lend funds. To date, the department has approved lenders to use the program - among them some of the largest in the business. Further, the department is currently processing nearly $1 billion in loan purchase requests, ensuring that students have federal student aid available to attend college this year.

Additionally, there are incentives and protections available to bridge lenders, including the ability to liquidate the collateral asset by putting the loan directly to the department. This protection afforded warehouse lenders did not exist previously. It dramatically cuts the time for a warehouse lender to liquidate loans. It provides guaranteed liquidation and at a price that is higher than the value of the underlying loan. This provides ample security to make loans that will be repaid in no more than 10 days - a timeframe we are working diligently to minimize further.

The department has and will continue to work with all segments of the marketplace to ensure that students have access to loans for the 2008-2009 academic year. Bottom line - loans are getting to students as we speak and the program makes bridge financing a low-risk proposition. I believe that's a win for students.

Lawrence Warder

Acting Chief Operating Officer, Federal Student Aid

Chief Financial Officer, U.S. Department of Education

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