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

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.

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

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.

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.

Evidence