ASLP Statement on "Easy Money"

Washington, D.C., May 5 – America’s Student Loan Providers (ASLP) Statement of Kevin Bruns, Executive Director, America's Student Loan Providers Regarding Release of “Easy Money” Report

“The report released today by PIRG should be taken with not just a grain, but an entire shaker of salt. It claims that the Direct Loan program saves taxpayers money and that the STAR Act will save even more. At best, this is a ‘Wish upon a STAR,’ as there is no evidence that the Direct Loan program has ever saved a dime of taxpayers’ money. 

“The Congressional Budget Office estimate referenced by the report is not in writing, certainly not official, and doesn’t even relate to this particular legislation. The report bases its conclusion on budget accounting rules that have been widely criticized by government agencies and independent experts for not reflecting the Direct Loan program’s true costs.

“The report also assumes that 100 percent of the schools in the Federal Family Education Loan Program (FFELP) will switch to the Direct Loan program. If Congress were to require this, it might just have a school revolt on its hands as 83 percent of colleges use FFELP exclusively. Perhaps most upset will be the more than 500 schools that have returned to FFELP in the last five years for its superior products and services. Many direct loan schools would also oppose ending the FFELP, as they too prefer having competition between the two programs.

“Instead of attempting to end the FFELP program, those who care about increasing access to higher education should work together to improve the program.”

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America’s Student Loan Providers represents more than 80 education and financial firms and organizations that provide federally guaranteed student loans through the Federal Family Education Loan Program (FFELP), a public-private partnership of schools, students, loan providers, loan guarantors, and the federal government. By leveraging private financial markets and competing for the right to lend to students, the FFELP brings value to students, schools, and taxpayers.  Students benefit through lower interest rates, and simplified loan application and approval processes.  More than 500 schools have switched to the FFELP since 1998 because it allows them to choose the lender that best meets the financial needs of their students.  More information is available at www.studentloanfacts.org.