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

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.

-
Industry press release from the Pennsylvania branch of Sallie Mae.

The federal education takeover is another example of the Democrats' willingness to use whatever tactics are necessary to advance their agenda to concentrate power in Washington—while they still can.

-
From the Wall Street Journal's anti-SAFRA op-ed “That Other Government Takeover”.

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.

-
Scott Faultless, President of the Fishers Town Council.

Here is what they haven't told us: The Education Department will borrow money at 2.8 percent from the Treasury, lend it to you at 6.8 percent and spend the difference on new programs. So you'll work longer to pay off your student loan to help pay for someone else's education -- and to help your U.S. representative's reelection.

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

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.