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Congress and the Bush administration are trying to reassure families that they'll be able to borrow money for college payments. That's after months of trouble in the student loan market.

NPR's Claudio Sanchez has been following two students from Harrisburg, Pennsylvania, as they await nervously for word about their loans. We have this update as the students prepare for the worst.

CLAUDIO SANCHEZ: When we first met 18-year-old Emmanuel Garcia back in the spring, he had just been accepted at Shippensburg University, a state school with a good academic reputation and $15,600-a-year tuition.

During a break at the pizza parlor where he's working this summer, Emmanuel says he's still in the dark about how he's going to pay for college.

Mr. EMMANUEL GARCIA (High School Graduate): I honestly don't know how much I'm going to need and who I'm going to need to borrow from.

SANCHEZ: A few days ago, Emmanuel visited the Shippensburg campus only to learn that the school had still not put together a financial aid package for him. So now, he's having to think about asking his family's bank for a loan.

Mr. GARCIA: I hope they're not one of the ones that put down. I'm hoping they would lend me money to use for student loans, because where I'm at right now is still, like, in the state of confusion.

SANCHEZ: Emmanuel's bank, Wachovia, has not pulled out of the student loan business, but over 64 other private lenders have. That strained nearly $10 billion out of the $65 billion federally subsidized student loan program. So students and families are scrambling to find private loans not subsidized by the government. Some are finding that the credit isn't good enough. And even if they do qualify, banks are charging much, much higher interest rates and fees.

With the fall semester just two months away, college financial aid officials still don't know how much money is going to be available. It changes day to day. I asked Emmanuel if maybe his parents can take out a loan.

Mr. GARCIA: No, not with the way their credit stuff is, no. So it's basically all on me.

SANCHEZ: Emmanuel, a tall, muscular teenager with a crew cut says, he's saving every penny he earns this summer for college. If not Shippensburg, I ask, what about the backup plan you talked about when we first met.

Mr. GARCIA: You know, the backup plan back then was to go to the community college, but I don't know.

SANCHEZ: Emmanuel says, academically, going to the local community college would be like another year of high school, which is exactly the way 17-year-old Marlo Johnson(ph) feels.

Ms. MARLO JOHNSON (High School Graduate): My original plan was to go Susquehanna University, using HCC(ph) if I could, it's Harrisburg Community College.

SANCHEZ: I tracked Marlo down at a McDonald's where she's working this summer. Going to community college would be especially painful for her because she's been accepted to an elite pre-med program at Susquehanna University. And thanks to her outstanding high school grades, Marlo earned $16,000 in scholarships, about half of what she needed her first year.

Ms. JOHNSON: So that left $17,320, okay? But then, when they told me they weren't going to give me any money at all and that I wasn't eligible for neither semester, it messed me up pretty badly.

SANCHEZ: They is PHEAA, the Pennsylvania Higher Education Assistance Agency. Up until a few months ago, it was the state's biggest provider and guarantor of student loans. PHEAA has stopped issuing loans and is now only issuing grants to the neediest students, grants that Marlo doesn't qualify for.

So instead of enrolling in a prestigious pre-med program and taking the first big step towards her dream of becoming a registered nurse, Marlo is headed for community college. She'll probably lose most of her scholarship money and have to work longer hours this summer.

Ms. JOHNSON: Welcome to McDonald's, how may I help you?

SANCHEZ: Marlo works mornings at McDonald's, at night, she works at a CVS drugstore. She looks tired, worn down by what's happened.

Ms. JOHNSON: Actually, I was really depressed over it because, you know, I have so many things and I have so many dreams and so many things I want to do, it feels like we're being denied an opportunity.

SANCHEZ: Marlo says, maybe she needs to put things in perspective, though. She pauses, looks around at the people working at the checkout counter at McDonald's and, as if to remind herself, says…

Ms. JOHNSON: You have people that've been working here for years and they're still making eight dollars an hour.

SANCHEZ: Marlo at least still has a shot at a college education. She says, she's worked too hard and come too far to give up on her dream. Marlo leans back in the hard plastic seat, adjusts her McDonald's visor, and says, I'll be fine.

Claudio Sanchez, NPR News.

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