Reply From Alexander Regarding the New SL Proposal
BlueRaiderFan
Thanks very much for getting in touch with me and letting me know
what's on your mind regarding student loans.
In September 2009, the House of Representatives passed the Student Aid
and Fiscal Responsibility Act and sent it to the Senate for
consideration. This legislation would follow the suggestion in
President Obama's proposed budget for Fiscal Year 2010 and eliminate
the Family Federal Education Loan Program (FFEL) - which provides
funds from banks and other private lenders - and require all colleges
and universities to convert to the government-controlled loans
administered under the Federal Direct Loan program in time for the
2010-2011 school year. Consistently, students and parents have chosen
the FFEL Program as their preferred method of obtaining student loans.
In Fiscal Year 2008, for example, nearly 12 million loans came through
the FFEL Program and only about 3 million came from the Direct Loan
Program.
By the Department of Education's estimates, it takes at least 3 to 4
months for colleges to make the switch from the FFEL Program to the
Direct Loan Program. I am concerned that this bill does not give
schools enough time to make the switch and avoid a 14 million car pile-
up on the interstate highways of American education. Today there are
2,000 lenders - banks and non-profit institutions - competing to offer
government-backed student loans at 4,400 campuses. The changes that
the Student Aid and Fiscal Responsibility Act propose would create
only one student loan banker, the U.S. Secretary of Education. I am
also concerned that reports claiming this switch will save $87 billion
are exaggerated
I don't think Education Secretary Arne Duncan came to Washington to be
named Banker of the Year. The Department of Education should not be a
$500 billion national bank. I would rather he become educator of the
year by focusing on ways to pay teachers more for teaching well and
setting higher standards. I have written a letter to Secretary Duncan
asking him to reconsider his letter instructing more than 3,500
colleges and universities to begin switching to the Direct Loan
Program. When the time comes for Congress to debate and act on
whether there should be a Washington takeover of student loans, I am
hoping the Secretary will want to work with Congress to make some
changes in the existing student loan program to make it right.
I appreciate your taking the time to let me know where you stand, and
I'll be sure to keep your comments in mind as student loan issues are
discussed and debated in Washington and Tennessee.
Sincerely,
Lamar