Here’s an interesting fact. 80% of American universities have chosen to work with the FFELP. Politicians would have you believe school administrators prefer to work directly with lenders so they can take advantage of personal gifts and perks. Yes indeed, I have often looked at school administrators with envy at their jet setter, devil-may-care lifestyles!

Here’s the truth – administrators prefer working with lenders because lenders meet the needs of the students. Everything else is secondary. Students are the customers and at the end of the day, an unhappy customer isn’t good for anyone. There was a time when colleges didn’t need to compete for students. Those days are long gone! In order to stay competitive, colleges have taken a business paradigm and applied it to education. Students are customers and alumni are stock holders. In this scenario, a happy student becomes a donating alumnus.
The same is true of the much maligned lenders. A student loan is just the precursor to a consolidation loan which could be the stepping stone to a home loan.

On the other hand, the FDLP is just another faceless, soulless, bureaucratic government program. The only return customers FDLP reps are thinking about, if they think, are the Congressmen who approve the funding. If the numbers look good on paper, the FDLP will get funded. If colleges are forced to use the FDLP, those numbers will improve - regardless to the cost of students. That means more tax dollars for their program.

Whatever the motivation, the sponsors of this epidemic of bad legislation expect you to believe that 80% of American universities are wrong. That’s just another of example of their bad assumptions. Maybe so many colleges choose to work with lenders over the government because they can’t afford leaving their business in the hands of a group that embraces assumptions over customers.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

Those wacky politicians in Washington want to phase out the FFELP. They believe it isn’t needed. Why they don’t think it’s needed is a difficult question to answer.

Just looking at the Stafford subsidized and unsubsidized and the PLUS loans, $39.1 billion in FFELP loans were made in 2004 alone. Those numbers come from America’s Student Loan Providers. They loaned the money so they know how much it is.

I tried to find comparable numbers for the FDLP only to find out the 2006 Congress Budget Oversight Committee admitted to having no idea how much the government has loaned out directly. That’s right. They are basing everything they say about the FDLP on estimates. More importantly, they have no idea how many taxpayer dollars they’ve loaned out. How do they know how much to collect?

I’m just curious because some of it is my money. You should care, too.

Does this mean I can just estimate how much I owe in taxes? No, because the IRS has a database and they will find out how much I owe. So what exactly is the FDLP using to keep track of loans? Do they keep track of it on a giant abacus and one day someone accidentally knocked it over? Are they using the cocktail napkin system? If you are in the business of making loans, how can you not know how much you’ve loaned out? How would you know if you had more money you could loan? How would you know when a loan was paid off?

There’s a lot wrong here and I think most of it is based on one very simple principle: Government isn’t business. I told you it was simple. That’s one reason communism doesn’t work. Imagine if business decided to act like government. See? They aren’t interchangeable.

What I find most troubling is the cavalier attitude towards our future. If they pass the Student Aid Reward Act, Congress is proving it doesn’t care if the FDLP is bad for students or taxpayers. Until they can fix the administration of student loans I don’t want them estimating my future.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

I guess it’s pretty clear from this blog that I love reading bills. I figure if someone went to all that trouble to write them and most Congressmen aren’t going to actually read them before they vote, I should at least take a look. Sometimes I’m pleasantly surprised when a piece of lucid, helpful legislation is drafted and I delight in telling my elected officials my opinion. Unfortunately, I haven’t been pleasantly surprised lately. No, today I was just angry. It seems some Senators are trying to sneak in their agenda while nobody’s watching. Well too bad because I’m watching!

S. 259 sounds pretty innocuous based on the title, the description, and the first few paragraphs. “To authorize the establishment of the Henry Kuualoha Giugni Kupuna Memorial Archives at the University of Hawaii.” I had no idea who Henry Kuualoha Giugni Kupuna was so I looked it up. He sounds like a pretty decent guy. He served in WWII. He was a policeman and firefighter. He worked for Senator Inouye in Hawaii and then in Washington for 30 years. He was the 30th Sergeant-at-Arms for the Senate. Ok, so Senator Inouye wants to do his old friend a solid and name an archive after him. I really don’t have a problem with that. Mr. Kupuna sounds like a good guy who really cared about his native Hawaii and I’d rather they name an archive after him than someone who just wrote a check.

That’s when I saw my first read flag.
“Mr. AKAKA (for himself, Mr. INOUYE, Mr. BYRD, Mr. REID, Mr. STEVENS, Mr. KENNEDY, Mr. COCHRAN, Mr. BIDEN, Mrs. CLINTON, Mr. DOMENICI, Mr. DORGAN, Mr. KERRY, Mr. LEAHY, Mr. LIEBERMAN, Mrs. LINCOLN, Mr. LOTT, Ms. MURKOWSKI, Mr. NELSON of Nebraska, Mr. REED, Mr. ROCKEFELLER, Mr. SPECTER, and Mrs. DOLE) introduced the following bill;”

Uh-oh. Kennedy, Clinton, Kerry and Rockefeller. I’ve seen those names before. That means the bill is going to need a little extra scrutiny.

The bill starts off okay. I don’t think it’s a federal issue; but, if they want to add cultural data from Native Alaskans and American Indians to the archive then I can see where the Feds might want to help.Then comes Section 1, paragraph b, sub-section 2:
“(2) to award scholarships to facilitate access to a college education for students who can not independently afford such education”
Scholarships? So are they saying federal money to fund University of Hawaii scholarships? Isn’t that a state school? I mean, no offense to the students of Hawaii, but why would they get scholarships? I could sense something else was wasn’t right.

“(10) to increase the economic and financial literacy of college students through the proliferation of proven best practices used at other institutions of higher education that result in positive behavioral change toward improved debt and credit management and economic decision making.”

Huh? Wait. You’ve lost me there. What does a cultural archive have to do with debt management? Then it hits me. “Best practices at other institutions” is code for “Colleges using the FDLP”. So now they’re claiming their support of the FDLP is to promote financial literacy among college students. So as a college student you should look to the government for examples of fiscal responsibility. Uh-huh.

To show an example of what fiscal responsibility looks like, Kennedy, Clinton, Kerry, and Rockefeller have signed the bill with there unique watermark – a blank check.

“(c) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $5,000,000 for fiscal year 2007, $10,000,000 for fiscal year 2008, and such sums as may be necessary for each of the fiscal years 2009 through 2012.”

So this year they want $5 million, next year $10 million and then a blank check for 2009…2010….2011…2012… There’s no mention of measuring how effectively the money is being spent or of a cap on the amount of funds. Ok students, now you should follow this fine example and plan your financial aid appropriately.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

If someone told you a piece of legislation would cost at least an additional $217 billion dollars within 5 years you’d probably ask for a little more information as to what was going to be done with all that tax money. You would think that legislation would spell out some pretty specific uses for that money.

“The Secretary shall make Student Aid Reward Payments to institutions of higher education on the basis of estimates, using the best data available at the beginning of an academic or fiscal year.” (Section 489A d 5 A) Ok, so money would go to schools based on the best information they have as of Jan. 1.

So how much money? Ah, it says see subsection c.

“The amount of a Student Aid Reward Payment under this section shall be not less than 50 percent of the savings to the Federal Government generated by the institution of higher education’s participation in the student loan program under this title that is most cost-effective for taxpayers instead of the institution’s participation in the student loan program that is not most cost-effective for taxpayers.” (Section 489A c)

Ok, but what does that mean? If a college participates in the program considered the best student loan program they’ll get a reward for choosing well. But how much money is that? And who decides which program is best?

And we know Congress isn’t really known for its math skills so there must be a simple formula to follow, right? Here it is – the reward will be at least 50% of the difference between the loan program the college used and the loan program they didn’t use. Well at least that’s clear. Each student loan will be compared to an imaginary student loan and if the difference is positive the university will get a check for 50+% of that difference.

But all this tracking and confusion will directly help students, right? Well…

Yes, the reward is supposed to be used by the universities to give to students in the form of grants, but the bill doesn’t say when the grants will be distributed. The bill does explain which students will receive the grants. If a student has a Federal Pell Grant and the university deems them worthy, a student might get an additional grant.

So the government will give real money to a university based on an imaginary number and the university will decide when and to whom that money will trickle down to. I’m sure glad we aren’t being asked to just throw away $217 billion! At least the universities will make some money.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

Today I thought I’d look more closely at what the perspective presidential candidates have to say about the current legislation winding through Congress. I thought I would, but then I realized the results coming up in Google were from the 2004 presidential campaign. That’s right – I couldn’t just go by the headline because they are recycling the same diatribe for the 2008 campaign season. In 2004, politicians were going to take education seriously. They finally realized there was a problem. Apparently, many of them forgot there was a problem until campaign season opened and it was time to take pot shots at the system.

Maybe they didn’t forget. Maybe it just took them that long to work down their to do list to get to “Criticize Subsidizing Student Loans”. Ok, Mr. Edwards, you can safely check that box off and move on to “Get Nails Done”. Maybe they should prioritize their lists in the future. That’s assuming they haven’t already prioritized them based on what will get them elected.

I really do want to see improvements to the existing financial aid programs, but I want to see responsible changes that will benefit students and parents. Making assumptions and then making plans based on those assumptions isn’t helping. Throwing money at the issues will not help. Promising money from one program to feed another will not help. Threatening to cut subsidies is also not going to help. Pretending it’s 2004 is certainly not going to help.

What I’d like to do is find the number crunchers who did the creative accounting for the Senators and have them give me an amount for all the extra bureaucracy, redundant legislation, and press releases they heaped on us. It might just be enough to cut all that out and earmark the savings for higher education subsidies.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

When H.R. 890 passed I thought it clearly pointed out how easily swayed politicians can be by the media and by their need to look like they are doing “something” even if that “something” isn’t in the best interest of their constituents. Only 3 Representatives were brave enough to buck the propaganda and stay true to their oath to represent their local citizens. They deserve a round of applause!

Representative Jeff Flake – Arizona 6th District
Flake has never been shy about his stance on education being a local matter. He makes a valid point. While the federal government should be involved, the local/state government has the best vantage point to know what the needs of the local population are. What is best for New York City may have no bearing on the reality of life in Billings, Montana. As I’ve said, good legislation puts the power in the hands of the local government where decisions can be made much faster than through Congress.

Representative Ron Paul – Texas 14th District
Dr. Paul has always been a fierce proponent for a return to sound economics in federal programs and a defender of the Constitution. Paul sticks to his principles and isn’t afraid to vote against legislation he sees as endangering those principles. His common sense approach to legislation is a welcome change to the usual posturing in Washington.

Representative Lynn Westmorland – Georgia 3rd District
Mr. Westmorland is a champion of free enterprise. He understands how the business of student loans really works, not just how his fellow members of the House would have us believe it works.

These 3 gentlemen had the strength of character to stand up for what is in the best interests of the people they represent. Do your Senators have that strength?

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

A couple weeks ago I created a hypothetical college student, Greg L. To recap: He’s not a 4.00 GPA kind of guy, but he tries. He plans to start his freshman year in the fall and he is more than a little overwhelmed by the financial aid process. Greg has heard the rhetoric, generalizations, and misrepresentations about financial aid reps at universities so he’s concerned he might be misled by the reps. He has no idea the biggest threat to his financial aid is coming from the people voted into office to represent him. With the swarm of Presidential candidates buzzing around and building hives of sound bites, poor Greg L. had better take a close look at what the candidates are really saying.

Let’s take John Edwards as an example. He is promising a system where students can borrow directly from the government. You know, like the system we already have that isn’t as efficient or as cost-effective as the FFELP, but he’s going to give it a catchier name. Oh, and he’s going to eliminate subsidized loans to private banks. I’m sure he’s going to do that with a nice catchy slogan too.

Well Edwards can’t say that without another member of the herd braying so Barack Obama steps up and says he can solve the financial aid problems by eliminating subsidized loans to private banks and making that money available to students. The one-upmanship begins!

I’m not an expert in Presidential elections so I’m not sure. When can I place my vote for most bone-headed idea? Will the Electoral College be involved?

Here’s the problem, well, one of the problems – both Obama and Edwards want to eliminate subsidized loans in order to help students. Either they don’t understand what a subsidized loan is or they are banking voters don’t. When a student receives a subsidized federal loan it doesn’t mean they don’t have to pay it back. It means the government will pay the interest while the student is still in school. Basically, Greg L.’s subsidized loans won’t start ticking until he graduates. When all his loans are placed together he will have to pay back lower interest overall because part of his loans, the subsidized part, will have no accrued interest. Under their plans, poor Greg will start owing interest on all his loans the moment he gets the check.

But Obama and Edwards just want to keep those evil private banks from all that free government money, right? Well, no. The banks use those subsidies to give refunds, lower interest rates, and other incentives back to students. Oh those evil bankers! How dare they make lending more affordable!

Luckily Greg L. is doing his own research instead of eating whatever the media feeds him, calling his Senators and Representatives to find out where they stand on student financial aid, and then he will be voting.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

I’ve been struggling to come to grips with the reasons so many politicians are backing the current onslaught of legislation even though it takes away students’ rights. The answer always seems to come back to political motives. In some cases they seem to be supporting the bills so it looks like they are doing something about the current financial aid news and growing unrest towards the high cost of higher education. Nowadays, politicians spend most of their time working on their next campaign or election. Every vote becomes a question of how they can spin it for the voters back home. Even those not running for re-election or looking for a nomination can make decisions based on political needs. Instead of rating a bill on its own merit it becomes a question of who is sponsoring it and what else do they support.

So when a member of Congress decides the FFELP program and subsidized student loans are a bad idea, what kind of logic goes behind that decision?

For some perverse reason, they think an expensive, government heavy program that costs us precious tax dollars every year is better for us than a well-established program that pays for itself. Just try to apply that logic to your every day life. Take everything in your refrigerator and throw it away then go to the store and only buy items you’ve never tried that aren’t on sale. You’ve wasted food, time, and money, but on the upside you might have gained some loyalty points on your supermarket’s customer card. That only makes sense if you have some desperate need for those points – sort of like the politician’s need for votes. You can worry later if you don’t like anything you bought and as long as you have an unlimited supply of time and money you can keep randomly spending. If you think that kind of thinking will help student aid, or anything else, you should change your major to Poli-Sci and think about a H.R. 1010 future in the Senate.

Another day, another self-serving piece of legislation works its way through the Senate Committee on Health, Education, Labor and Pensions. But it isn’t about how the media is going to talk about the legislation. It’s about the students. At least that’s what the media and the Senators sponsoring the legislation tell me.

To be fair, some of the federal education programs need work, but the FFELP is doing a great job. Sure, there’s room for improvement, but it isn’t costing tax payers any money and the lenders and school administrators like it. A-ha! That’s a new tactic for this season – attack the school administrators. Did you know one school official said he was once offered a trip to someplace sunny to hear about a lender’s new loan program? What’s next – doctors having expensive dinners paid for by drug reps? Senators going on golfing retreats paid for by special interests? It’s not like Senator Kennedy would use a gala hosted by a non-profit financial aid resource provider that was organized by the CEO of a large bank and a TV news anchor woman to soap box the legislation he’s sponsoring. Well, I mean he’s not doing that again.

Here’s the thing: If the politicians want to rally against perceived misconduct then they should start closer to home. When the Sunshine Act went before the House for vote, a little addition was made to spell out what financial aid officers and lenders can and cannot do. Sure, there are already laws in place like the Fairness in Lending Act and the Truth in Lending Act that cover that, but those are old. The Truth in Lending Act is from the 60’s! Ted Kennedy is the only politician who can still ride that horse to the polls. The important thing is that little addition makes it even more politically timely than the bill already was. It doesn’t matter if it’s redundant. It only matters if it will play well in the press. That doesn’t sound like putting students first to me.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

In a perfect world the government, educational institutions, lenders, parents, and students would all come together to make college available and affordable. If you try to eliminate any of the players and try to create a plan, your plan will fail. If any one group could solve the financial aid problems without involving the others they would have long ago! No, they are stuck with each other.

But that’s not all bad! Take the so-called 529 plans. This is what legislation is meant to do! The federal government has set up 2 kinds of 529 plans that are managed at the state level. One option is to pre-pay for tuition. The funds are usually guaranteed and can be applied for tuition at participating universities in the state of residence.

The other option is to invest in state sponsored low-risk mutual funds with after-tax dollars. In this kind of 529 the distributions, including earnings, are tax free when used to pay tuition and other associated cost of college. With these plans, parents and students can prepay or invest over time before the student begins college. The distributions cannot be used to pay on student loans and there is some risk, but the funds can be used for out-of-state tuition.

Parents and students can save for education while benefiting from tax savings. In some of the pre-paid plans they can lock in the tuition price for future savings.

Lenders like 529 plans because they get cash for investment in mutual funds. Since part of the tuition is already taken care of, parents and students need to borrow less. That means less risk for the lenders. Since the distributions cannot be used to repay loans they are not competing against themselves.

Universities like the programs because they can lock-in students early while getting an infusion of cash.

That just leaves the government. Unlike some other programs, the federal government has passed the execution of the plans to the state. State governments like this because they understand the needs of the students and the situations of the parents in their states better than the sweeping generalizations needed in federal legislation. To a large extent, the State passes the administration of their plans onto the lenders and universities and sets up a system of checks and balances to monitor the programs.

Contrasting this successful plan to the plans currently being considered by Congress is like comparing ice cream to spoiled milk. 529 plans are pre-emptive. They help parents and students before the debt is incurred. It’s a valuable education in fiscal responsibility! The proposed legislation is reactionary. It makes assumptions that can’t be verified while giving the federal government more control over your future.

With the FFELP program and the 529 plans, the future of student financial aid is looking more secure than ever before. Sabotaging these long-term solutions for short-term political gain is a betrayal to tax payers!

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

I did a completely unscientific survey today. Ok, it was really an impromptu lunch with several students in various stages of their academic careers. Even though they were from different universities with different majors they all had one thing in common – student loan debt. So I asked them if they felt they were given bad advice on their student loans by their financial aid rep. They all thought they had gotten the best deal available. They also all mentioned that they had to get student loans. Paying for college without loans simply wasn’t an option. Their primary concern was finding jobs that would pay well enough for them to pay back their loans. Basically they have the same worry as most college students – tuition cost has gone up faster than salaries.

So if the real concern from students is repaying their loans why is all the talk from Congress about how the loans are processed? Why is the rhetoric all about who should be administering the loans and not about why even state universities are too expensive for students to pay without getting loans? Why aren’t their elected officials asking them what their concerns are instead of trying to tell students what their concerns should be?

I don’t have answers to these questions, but I do know the Congressional Education Sub-committees aren’t coming up with any suggestions to save students real money. The private lenders, working with the FFELP and on their own, have come up with many innovative ways to put more cash in students’ pockets without raising their loans. Under the proposed legislations, those lenders would have their hands tied to help students. The cost of education wouldn’t decrease. Loan options wouldn’t increase. Students would still have that same basic worry – will they be able to pay for the education they need for the careers they want.

With Congress not addressing the problems facing today’s students maybe the primary concern should be who are these people really representing. Email your congressmen and tell them what really matters to you!

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

Senator Obama, when he wasn’t too busy campaigning for the Democrat Presidential Nomination, made some statements about student aid. Oh, actually I think he made the statements as part of his campaign for the nomination. It’s nice he can do both jobs at once. And how efficient! He can use the official website of the U.S. Senate to post his self-serving statements and claim its part of his duty as a Senator. It’s a good thing none of the Senators looking for the nomination would use pending legislation as a political stepping stone instead of looking out for the interests of the people they represent! That would be like banks offering student loans with rebates and reasonable terms because they want to create customer loyalty. If the Illinois Junior Senator did something like that it would be hypocrisy!

So what did Obama say? “…it is not a coincidence that as the banks’ profits have increased so has the loan burden for college students.” He is absolutely right. Tuition goes up, grants stay stagnant, and banks pick up the difference. The lenders perform a service and they make a little money doing it. That’s because they CAN make a profit doing it. Apparently it’s ok for the private subcontractors to make a profit, but not for the private banks.

In that same statement Obama had another sound bite worth repeating:

“We must create incentives, not penalties, for students who aren’t fortunate enough to have someone else pay for their higher education. While students in need used to be able to rely on federal grants to cover nearly all of their college costs, they are increasingly forced to rely on private lenders that charge higher rates over longer terms.”

Incentives? You mean like the rebates private lenders can currently offer? Penalties? You mean like the government taking away the student’s freewill? Again, as much as I hate to say it, he’s right about federal grants. Federal Grants haven’t kept pace with the rise in tuition costs. And he is also correct that private lenders charge higher rates than grants since you don’t have to pay grants back. Yes, Senator, 0% is lower than a government mandated percentage. I’m sure your parents are very proud of your Ivy League education now that you can use a number line. I can also say, from personal experience, it takes longer to pay back something rather than nothing. I’m not sure how his theory of giving away money is economically feasible, but I’m sure he’ll have a press release about it once his campaign advisors figure out how to spin it.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

Your elected officials are supposed to represent you to the best of their ability. Let me repeat that - to the best of their ability. Their job is to put themselves in your shoes. Here are the two biggest problems with that. They’re used to wearing $400 wingtips while you’re stuck wearing Nike knock-offs and they are treating their jobs like hobbies.

I’m all about everyone getting ahead in life, but it seems Congressmen tend to get ahead faster than the rest of us. Only 1% of Americans are millionaires, but 35% of those in Congress are. That doesn’t seem like a representative sample to me. I bet your Senators don’t use coupons at the grocery store. I bet they don’t even wish they had used coupons. I bet they don’t even do their own shopping.

So why do we trust their opinions about what we should buy when it comes to student aid? Their children don’t need loans to pay for college. If any of them have student loans it is probably as part of some complicated tax deduction scheme, not necessity. They say they understand the importance of education, but do they understand that not everyone can just write a check to pay for it? If they know what we really need, why do they keep drafting legislation like the Sunshine Act which clearly isn’t what we need?

Maybe I’m being too tough on them. They are representing the people to the best of their ability. They don’t understand things that you and I take as common sense. They can’t be expected to know how the other half, or in this case the other 99%, live! And that’s why you and I and everyone we know needs to get more involved. Call your Representative. Email your Senator. Sign the petition to stop the student loan tax. Tell them that they need to stop representing themselves and start representing you! Make it clear to them you want better student aid, not less!

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

I know it might seem like I’m picking on the Sunshine Act this week, but I’m just amazed at how dim senators think we are. Not only do they assume all college students take out loans willy-nilly, they assume students take out loans using the same consumer methods as they buy sweat shirts.

Think I’m kidding? There’s a subparagraph in the Sunshine Act telling universities they will not allow lenders to use the school’s name, mascot, etc. when advertising private loans to students. Apparently Congress believes you will run out and sign up for any loan that features a drawing of your beloved football team’s mascot. You have such school spirit! Next time you are in the university bookstore why don’t you pick up a T-shirt for your little sister, an overpriced notebook for your physics class, and a loan for yourself?

There are a lot of things wrong with this scenario.

Can a college keep a lender from using any “…words, pictures, or symbols readily identified with the institution…” as stated in the Sunshine Act? That really falls into trademark law and doesn’t belong in a bill like this. I suppose a university can tell a lender not to use its mascot without permission as a reminder of the law. Not using the name of the university is a little harder. Are the lenders going to be forced to only advertise at least 100 yards away from the main campus as well?

Are students so programmed they will sign for a long-term loan based solely on the quality of the advertisement for the lender? Again, I think Congress is under-estimating the intelligence of students. Even the least savvy of consumers among students isn’t going to take the first choice that comes along with their school’s name printed on it. Seeing the ads for lenders should help make students better consumers because they can see there are other options for them.

On first inspection, it might seem like a good idea for Congress to tell private lenders how they can market their products, but just a little logic will quickly tell you that any reputable lender is making student loans based on long-term strategies. Any disreputable lender isn’t going to change their m.o. based on yet another piece of unenforceable legislation.

At best the Sunshine Act is naive. At worst it is an attempt to take away free will and open trade. Tell your senators that you’re not stupid and you aren’t falling for their tricks!

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.

Someone just pointed out to me that the so-called “Student Loan Sunshine Act” will mean the financial aid representatives, the very same people currently under fire, will be instructing parents and students which private lenders they can and cannot use and how much they can borrow. That didn’t make any sense to me. Why would Senators Kennedy, Clinton, Kerry, and Rockefeller want to give more power to the same people they were just chastising?

I decided to look the bill over again. As I shifted through this very poorly worded document I found myself thinking about the administrative cost of this plan. All educational institutions receiving any federal funding or assistance will have to provide a written report on each lender they have made any student loan arrangements with. Each report will include why the institution feels the terms and conditions are in the benefit of the students for each loan type that lender is offering. That sounds like a lot of extra paperwork for an already highly bureaucratic, over worked financial aid department. Those reports would have to be given to students or their parents as well. There’s nothing like another 20 pages of complicated double talk to make the financial decisions easier, is there?

But the Sunshine Act will spread the time consuming and ultimately meaningless work around! Each lending organization will have to submit their own report on every loan arrangement and all information imaginable that is even peripherally associated with the arrangement. That includes information on marketing and endorsements. Lenders would also be limited in how they can advertise their products to students. Why would the government care how lenders advertise? There are already laws and organizations to protect consumers from false advertising. And why does the government want a report on all the minutia involved in each loan?

And who is going to go through all these reports? Don’t worry, the Sunshine Act has an answer for that one too. The Secretary will go through all the reports and then make another report to deliver to committee in the Senate and the House. Those committees will then draft another report to present to Congress. Before the Secretary’s report has time to be mulled over completely, the Secretary will submit another report explaining what changes need to be made in the formats of the reports created by the institutions and lenders for the upcoming reporting year. Is someone in the Senate getting paid every time someone says “report”?

The Sunshine Act will protect students in the end though, right? If all the reports are audited and proven to be accurate and then the reports on the reports don’t lose anything in the translation, and if borrowers can obtain, read and digest the reports before they need the loan…no, that still doesn’t really help. That just means any dishonest people will continue being dishonest, but they will have a blanket of reports to disguise themselves. A student needing financial aid for the next academic year would theoretically be able to read reports on the potential lenders that would only be 3 or 4 years out of date. Whew! It’s a shame there isn’t a financial aid office or something where experts could help them in real time.

But Senators Kennedy, Kerry, Clinton, and Rockefeller are just trying to help students, right? Oh how I wish I could say yes, but their motives are far from altruistic.

First, they get sound bites for upcoming elections so they can sound like they care about the problems of young Americans and they are doing everything within their power to help. They will be very quick to point out that the Sunshine Act was drafted to keep those evil financial aid people and those heartless lenders from bullying students into bad decisions.

Second, they create a level of administrative cost that makes offering financial loans cost prohibitive to many lenders while making it more advantageous to educational institutions to limit the number of lenders they are associated with. By signing up with the FDLP and forming alliances with only a few mega-banks, institutions will cut their reporting efforts dramatically.

Don’t be blinded by the Sunshine Act. It’s bad legislation and bad business!

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.