Student Loans

Student Loans

College costs are growing rapidly and financial aid hasn’t kept up. Close to 70 percent of undergrads graduate with debt. In 2009, the average student borrower owed $27,600.  The Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 ensures that all federally funded student loans will be directed through the federal government’s Direct Loan Program (DLP,) saving $61 billion and using that money to fund increased Pell Grant funding.  SAFRA abolished the Federal Education Loan Program (FFELP), which used subsidized loan companies to provide student loans. 

Cry Wolf Quotes

Finally, the government should disclose that getting your student loan will become about as enjoyable as going to the Department of Motor Vehicles.

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Senator Lamar Alexander (R-TN) published this anti-SAFRA op-ed in The Washington Post.

Gone will be the days when students and their colleges picked the lender that best fit their needs; instead, a federal bureaucrat will make that choice for every student in America based on still-unclear guidelines.

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Senator Lamar Alexander (R-TN) published this anti-SAFRA op-ed in The Washington Post.

Legislation passed by the U.S. House of Representatives, however, would require all federal student loans to be originated by the federal government, jeopardizing hundreds of private sector jobs in Wilkes-Barre and hampering related economic development in the state. Sallie Mae currently contributes more than $40 million annually to the local economy and has contributed millions to local charities.

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Industry press release from the Pennsylvania branch of Sallie Mae.

Ultimately, what they are trying to create here is the Post Office of student lending — you've got no choice.

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Jack Remondi, vice chairman and CFO of Sallie Mae, Time Magazine.

Evidence

Resources

Campus Progress is the youth wing of the Center for American Progress. They do work in both advocacy and journalism.

Higher Education Watch is the New America Foundation's blog about the politics and policy of higher education.