Student Aid and Fiscal Responsibility Act

Student Aid and Fiscal Responsibility Act

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 taxpayers $61 billion and using that money to fund the rest of the bill.  It abolished the Federal Education Loan Program (FFELP)—which used publicly subsidized private loan companies to provide student loans.

SAFRA provided the Pell grant program with an infusion of $36 billion (over 10 years), increasing the maximum award to $5,550 in 2011.  SAFRA also ensures the program’s benefits will now grow with inflation every year, plus one percent.  SAFRA makes student loan interest rates variable, but caps interest rates at 6.8 percent to protect borrowers from unreasonably high rates.

SAFRA also increased funding for community colleges ($2 billion in available grants).

Cry Wolf Quotes

CBA also disputed administration claims that eliminating the FFEL program would not result in poorer customer service to students and parents. More than 30,000 people are currently involved in helping students via the FFEL program. These experts understand students' loan obligations and how to get students the help they need when facing difficultly in repaying their loans. Firing them and hiring some untrained replacements, as the President proposes, would be a huge setback for educational opportunity.

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

The response from the community has been incredible. Our local leaders, our families, our friends, our neighbors; more than 80,000 concerned citizens want our Senators to understand the economic impact of these jobs and the valuable services we provide students and families every day.

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Jon Kroehler, Senior Vice President of Sallie Mae.

For decades, Sallie Mae has done great work to support millions of students and families and that is felt right here in Central Indiana through employment opportunities and economic development. With unemployment in our region at more than 10 percent, these are jobs we can’t afford to lose.

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Scott Faultless, President of the Fishers Town Council.

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.

Evidence