The U.S. Education Department will spend as much as $6.5 billion to buy federally guaranteed loans offered by private lenders to ensure students will have aid during the credit crisis.

The department will spend up to $500 million a week through February to buy Federal Family Education Loan Program loans from the 2007-2008 school year. After that, government support begins for a so-called conduit loan program, according to a statement posted recently on the department's Web site.

The recent announcement will "minimize potential disruption in student lending" until the conduit loan program begins, the department said. The purchases will help free lenders to make remaining disbursements for this academic year, an industry official said.

The global financial crisis has extended beyond banks, and the markets for student loans, auto loans and credit cards are "currently in distress," Neel Kashkari, the Treasury Department's assistant secretary in charge of a $700 billion rescue plan for banks, said on Nov. 14. Education Secretary Margaret Spellings said in the statement that she was using authority granted by Congress.

The action will "protect students and their families during the unprecedented current market conditions" and ensure lenders continue to disburse student loans, she said.

About $55 billion worth of Family Federal Education Loan Program loans were disbursed during the 2007-2008 academic year, U.S. Education Undersecretary Sara Martinez Tucker said in a conference call. Of those, as much as $35 billion in loans made as part of the Stafford and the Federal PLUS programs are eligible for consideration under the short-term plan, she said.

Loans not eligible for the short-term measure include consolidated loans, those more than 210 days in arrears, loans already securitized and loans with borrower benefits such as cash rebates or gifts, Martinez Tucker said.

The plan will give lenders the liquidity to meet any remaining disbursements on loans for the 2008-2009 academic year, said Brett Lief, president of the Washington-based National Council of Higher Education Loan Programs, a trade group. The 2007-2008 loans will be repurchased at 97 percent of cost and any accrued interest.

The program expires Feb. 28 or perhaps earlier. After that, the department will use the new conduit, which will borrow money and lend it to student loan providers for a fee, Lief said.

"A number of lenders will benefit from this," Lief said. "It will provide them with an opportunity to increase their liquidity and enable them to be a full participant in the student loan program."