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

Currently, students have the option to choose between private and public lenders, and I am a firm believer that such choice and competition among lenders is the best proven method for reducing costs and improving services. By omitting private lenders, we would create a monopoly within the federal government regarding student loans.

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From a statement issued by moderate representative Paul Kanjorski (D-PA) after the House approved SAFRA.

Gone will be the days when students and their colleges picked the lender that best fit their needs; instead, a federal bureaucrat will make that choice for every student in America based on still-unclear guidelines.

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

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.

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

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.