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

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.

The President's plan, although touted as a means of promoting higher education, is not. The plan does not reduce the cost of student loans for a single student. Students and parents need to know that under this proposal, the government's profits on student loans borrowed by middle income students will be used to finance other student aid.

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

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.

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.

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.