In May of 2008, Congress passed the Ensuring Continued Access to Student Loans Act (ECASLA) in response to concern that credit market conditions could disrupt federal student loan availability. The law gives the U.S. Department of Education temporary authority to purchase federally backed student loans made by private lenders, effectively providing a secondary market for the loans. Congress opted to leave the new purchase authority largely undefined in statute, giving the Department considerable discretion to design and administer it.

Each year, the federal government guarantees billions of dollars in loans disbursed through the Federal Family Education Loan (FFEL) Program, a public-private partnership that provides financial aid to students attending institutions of higher education. Despite the significant investment of taxpayer dollars, the actual  administration of the FFEL Program is largely handled by participating lenders and a group of 35 non-federal guaranty agencies across the country. Guaranty agencies perform a number of administrative functions, such as disbursing federal default insurance provided to private lenders issuing FFEL loans, preventing loan default, and collecting or rehabilitating loans that borrowers have failed to repay.

President Barack Obama submitted his first budget request to Congress on May 7, 2009. This request follows the initial summary budget request he submitted in February that included only aggregate funding levels for federal programs and agencies.

It is a stark, indisputable fact that many of America's high school graduates are not ready for the rigors of college. Fewer than half of the high school juniors and seniors who took the ACT national college admissions test in 2008 met its college readiness benchmark in mathematics. Of the 40,000 freshmen admitted into the California State University system in 2007, more than 60 percent needed remediation in English or math. Nationwide, nearly a third of all incoming freshmen—42 percent of first-year students at public two-year colleges—require remediation.