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

The furor over President Obama's trillion-dollar restructuring of American health care has left his other trillion-dollar plan starved for attention. That's how much the federal balance sheet will expand over the next decade if Mr. Obama can convince Congress to approve his pending takeover of the student-loan market.

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From the Wall Street Journal's anti-SAFRA op-ed "The Quietest Trillion".

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.

We also have concerns over the potential impact on Sallie Mae's operations in Delaware, which employs nearly 700 workers. We ask that as you draft the committee's mark ... you maintain a role for Sallie Mae in the student lending process that recognizes the important services Sallie Mae has provided millions of students and mitigates any potential job loss in Delaware.

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A letter from Delaware Senators Tom Carper (D) and Ted Kaufman (D) to Senator Tom Harkin (D-IA), chairman of the Senate Committee on Health, Labor, Education and Pensions. Hill’s Briefing Room blog.

The President's plan, although touted as a means of promoting higher education, is not. The plan does not reduce the cost of student loans for a single student. Students and parents need to know that under this proposal, the government's profits on student loans borrowed by middle income students will be used to finance other student aid.

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The Consumer Bankers Association’s Director of Government Relations, Marcia Z. Sullivan. Consumer Bankers Association’s press release.

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.