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 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".

There's Washington, and then there's the rest of the country. This is the rest of the country….We don't want just any old jobs. We want our jobs.

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Albert L. Lord, Sallie Mae's CEO, Chronicle of Higher Education.

The student-loan provisions buried in the health care legislation intentionally eliminate private-sector jobs at a time when our country can least afford to lose them.

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Sallie Mae Spokeswoman Martha Holler

Evidence