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Student loan cuts could hurt students and program, ASLP warns senators in a letter
America’s Student Loan Providers today sent a letter to senators urging them to oppose significant budget cuts in federal student loans. …
“The Senate’s first priority should be students and the grant and loan programs that serve them,” the letter states. “Deep budget cuts would make it nearly impossible for Congress to increase access to higher education through much-needed program improvements as part of the [HEA] reauthorization.”
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Fast Facts
In 2003, the private sector student loan program raised and lent $34 billion to more than 5 million students and their parents.
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Superior Service Is Key Reason Schools Return to FFELP
Read the survey report.
Washington, D.C. – America’s Student Loan Providers (ASLP) today issued the results of a survey of schools that have left the Direct Loan program and returned to the private-sector Federal Family Education Loan (FFEL) program. The ASLP survey, conducted by Rockbridge Associates, Inc., polled financial aid administrators (FAAs) at former Direct Loan schools to determine why more than 500 schools have left the Direct Loan program for the FFEL program.
Kevin Bruns, ASLP Executive Director, said, “These results show that there’s a perfectly good reason why so many schools have returned to the FFEL program – our members do a much better job meeting the needs of students and schools. We urge Congress to listen to what financial aid administrators have been saying and preserve choice and competition in federal student loans.”
Among the key findings:
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Overall, 86 percent of school officials surveyed say the private-sector FFEL program is a better program, compared to 14 percent who say the two programs are about the same.
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Customer service and reconciliation issues are key reasons that schools returned to the FFEL program: Borrower benefits and the FFEL program’s superior technology were also cited as key reasons for switching – half of FAAs surveyed said both were “very important” factors in their decision.
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Overall, three-fourths of FAAs believe the FFEL program better satisfies their institution’s needs: FAAs are significantly more likely to perceive the FFEL program as more responsive, easier to manage, and more financially competitive than the Direct Loan program.
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FAAs identified several key benefits of the FFEL program, including the funding process, service and support, and the time and effort the program requires: Additional benefits cited include problem resolution, control over funding process, reconciliation process, benefits to the students, and choice of lenders.
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Remarkably, six-in-ten FAAs said the FFEL program had no drawbacks: None of the FAAs reported that direct lending is better at meeting their institution’s needs or their students’.
The research report on the survey is available on both the ASLP web site and the Rockbridge web site.
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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 information is available at www.studentloanfacts.org.
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