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.

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.

Have you ever wondered who keeps track of the national government programs that work and those that don’t? Once you get past all the groups that claim to monitor the federal programs, there’s the U.S. Office of Management and Budget. Part of its mandate is to review federal programs and, to that end, it has developed the Program Assessment Rating Tool (PART) to help quantify if a program is working. PART can easily answer if a program is working, failing, or not showing any measurable results. From there it can make recommendations on improvements. It’s a nonpartisan tool that works! So why are there so many congressmen ready to ignore it?

The PART questionnaire shows the Federal Family Education Loan Program (FFELP) is performing “adequately.” OK, that’s not great, but it means it is working. It just needs some improvement, a little tweaking. The U.S. Office of Management and Budget has even made some recommendations. One of those recommendations is to increase the benefits to students currently enrolled in school. That seems to make perfect sense since that is part of the program’s directive.

A piece of proposed student loan legislation is currently going through the committee. It says its purpose is to lower interest rates for student borrowers. Unfortunately, it does that only for a handful of students for a limited time while tearing the heart out of the FFELP. This legislation would stop the FFELP lenders from offering incentives to student borrowers. In addition to giving up their ability to give rebates and special interest rate plans, lenders in the FFELP program would be forced to pay higher fees. Fewer tools to attract students and less capital to loan … Why would any lender want to be part of FFELP under those circumstances? Part of the purpose of FFELP is to encourage private lenders to help students. This new student loan legislation doesn’t explain how having fewer lenders would help more students find affordable loans for school.

It makes me wonder if the nice congressmen have even bothered to look at the recommendations before proposing legislation that doesn’t seem to help students at all. So why is the student loan legislation even being considered by Congress?

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.

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.

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 have lots of friends who wouldn’t be in college today without student loans. They take it for granted as being the nature of the beast called education. Their colleges aren’t making credit hours more affordable. Their housing cost isn’t going down. Gas is at an all-time high. Who can help them in their time of need? No, not the government! Even with federal loans the average student will need to borrow more aid just to get through a semester at a reasonably priced school. That leaves private lenders as their only allies.

I know it’s seen as unpopular to support private business, but without these lenders students would be unable to graduate even in the current five year average. Somewhere along the way people developed this idea that bankers are parasites waiting to foreclose on mortgages and kick puppies.

It just isn’t true. There’s a mutually beneficial relationship between lenders and borrowers.

Unfortunately, lenders are being viewed as the villains. Graduates are upset about their student loans and who do they blame? They blame the bank who sends them their statements. Did the lender institute a tuition hike? Did the institute reduce grant money? Nope. The lender had to bite the bullet and loan out more money to make up for the financial aid shortfalls. As long as students graduate and repay the loans, the lenders will make a very modest profit. Without their current loan infrastructure in place, they would be unable to do so. More loans mean more profit, but it also means more risk and less cash on the books. It isn’t a perfect system, but lenders and students have got to hang in there together!

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.

With the rising cost of tuition and the inability of Congress to actually help students, many are taking the option of attending a Community College for several years before attending the university they want listed on their diploma. As a cost strategy it is a great idea. I don’t have anything against Community Colleges. I think any education is better than none, but many of these schools just aren’t equipped to take on three-year students who plan to transfer. They are trying to change their paradigm, but that takes time.

At first I thought traditional universities would be upset about this, but then I remembered the graduation statistics. Someone has to fill those empty seats left by students who couldn’t or wouldn’t continue. Transferring students in from community college is one option. Of course, not all credit hours will transfer and the student will probably spend an extra year trying to make up the hours at the traditional university, but that too is to the benefit of the school. Students are more likely to be accepted at a traditional university as a transfer student so at least students have that going for them. But what about the quality of their education? What about building a peer network for the future? How about becoming engrained in a program that can help them academically and professionally?

Are students shortchanging themselves by taking the community college option? It really depends on the school, the student, and the subject. My point is they shouldn’t have to make the decision. Affordable education doesn’t have to mean poor education and expensive education doesn’t have to be expensive. So while Congress tries to convince you they are working to save you a quarter of a percentage point on a loan you won’t have, costs are dictating decisions for you that just might save you money in the short term, but cost you knowledge in the long run.

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 met a really nice med student today and we almost made it through the entire conversation without talking about student loans. Almost. She’s studying for the boards right now, but she’s dreaming about her upcoming vacation to India. It sounded like a fun, three week trip. Yeah, she hadn’t planned on staying more than 12 days, but then her student loan came through and it was for more than she needed so she was going to spend the money on the vacation.

Here we have an intelligent student who is probably going to make a brilliant doctor, but her huge med school debts will be even greater because she’s using the money to live (and play). When her patients complain about the high price of medical care, she’ll be able to explain that education debt and overpriced malpractice insurance are to blame. I’m not going to lecture about students being more financially responsible. With the crazy class schedules students get forced into and the amount of course work required, getting a job isn’t always an option. Getting a job that is going to pay all the bills is almost impossible!

But what does Senator Kennedy think should be done to rectify this? Students should learn how to be more responsible with their student loans. You mean like the FDLP loans that keep students from being a more responsible consumer by keeping them tied to the government’s apron strings? You mean by keeping the private lenders from explaining their programs to college loan administrators so they can educate the student loan recipients? Sorry, Senator. It looks like we disagree. Again.

It’s not that I don’t want students to understand the bigger picture of their student loans. I just don’t think it’s the government’s job to do it. As far as protecting students from the private lenders who would mislead them, well just think about that one. Why would private lenders want to make loans they don’t expect to be repaid? They wouldn’t. They want to make every student that borrows from them a success because that means they have a better chance of getting money back on their investment. The problem doesn’t start with the banks. It starts with the schools.

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. –>

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Did you hear the four largest private student loan lenders have agreed to a completely transparent code of conduct that they will enforce and police themselves? See, business executives understand that when consumers lose confidence, they lose business. Personally, I think the whole “scandal” was blown completely out of proportion for political reasons, but the industry has to deal with the media and the public perception caused by the media – just like politicians. And kudos to the banking industry for stepping up and developing a plan that will actually work without costing taxpayers a dime. We need more plans like that!

My question is where is the hoopla from the media and Congress about the responsible actions taken by the lenders? I guess it isn’t as good a story and it certainly isn’t going to help politicians misdirect the public from the real problems. You would think Congress would be ecstatic. Now they can cancel at least half of the higher education bills they have in committee! Nobody has to figure out how to enforce another round of bad legislation! No aide will have to explain the legislation to their Senator! It’s the trifecta of the legislative branch! We should run to the teller and cash out before the next race!

Instead of celebrating, Congressmen are still running around looking for a way to capitalize on the non-issue. Even though they can’t provide any numbers to prove it, some Senators are still trying to persuade their colleagues and the public that the FFELP has failed.

Did you hear the FDLP has a $16 BILLION shortfall? No? There’s some bad news that hasn’t gotten out to the media. I guess the Congressional Press Office is being selective with the information they release. It makes me wonder what other information they aren’t sharing.

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 recently met a person who was one of the first recipient’s of an FDLP loan. She graduated quite some time ago, but she has yet to pay back the loan. She actually has no intention of paying it back. So the government, as the issuer of the loan, has garnished her wages and tax refunds to get the money back, right? Well, no. No, they haven’t done anything, but send an occasional letter and she hasn’t even gotten one of those in quite some time. When she graduated she didn’t get a good-paying job and she can’t afford to pay the loans back. That’s an unfortunate situation, but not just for her. Those were tax dollars she borrowed.

Collecting money is just another example of an FDLP failure. Private lenders would have known the school wasn’t properly accredited which meant her chances of getting a good-paying job were reduced. A private lender would have looked into her credit rating, not just her financial need. I’m not saying the private system is perfect, but how often do they just give up on getting their money back? Here the FDLP has given up on getting your money back!

If the Department of Education was good at collecting money they would merge with the I.R.S. If they were good at keeping track of money, they could say how much they’ve already loaned out to students. If they really cared about the financial aid crisis, they would get to the bottom of why college has become so unreasonably expensive. Of course, they couldn’t do that even if they wanted to because they don’t understand market factors and growth margins. That’s why Congress and the Department of Education aren’t private lenders. They just don’t have the necessary skill set. Fiscal responsibility begins with using tax dollars appropriately and ends with reclaiming tax dollars efficiently.

The FDLP has failed beginning to end.

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.

Congressmen are really not selling me on their qualifications to vote on Education legislation. Last week Steve LaTourette, whose pre-Congressional work is very impressive, admitted he left Ohio to go to college in Michigan because at the time the drinking age in Michigan was lower than Ohio. What? He didn’t go to the best suited college, the most affordable, or even the closest. He chose an institution of higher learning based on the ability to drink alcohol. Certainly he’s proven himself a capable lawyer and prosecutor and an attentive Representative, but if he equates his collegiate decision with the thinking of modern college freshmen, no wonder Congress feels the need to restrict the options of students!

How many times have you heard Congressmen make some comment about not being Internet savvy or not understanding computers? While they have had their 8 terms and grown fat on special interest the world has changed. College isn’t seen as a luxury anymore. Students know they need to get a degree if they want to get a decent paying job. Most of them assume when they are in high school that they will be going to college. They may not know their major, where they will go, or what they will be when they grow up, but they know the will need education.

Congressmen went to school and were legacies in their father’s fraternities and had their lives all planned out. I’m not begrudging them! There have been plenty of times when I would have loved to have been a legacy or have my parents paying my college tuition. The problem is most of us never had those advantages. Even with aid most of us will have to have at least part time jobs to make ends meet.

I don’t care how many experts they have come in and testify about the challenges faced by today’s students. The issue is bigger than a handful of so called experts. Students aren’t making the decisions their parents made. Just because a few Representatives made good choices for bad reasons or the majority of the Senate didn’t have to make decisions for themselve doesn’t mean today’s students aren’t capable of making the decisions that are right for them!

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.

There was an interesting discussion in the House the other day. They are thinking about repealing the internet gambling law of a few years ago. It wasn’t attended by a lot of people and it was a Friday so there were more people there to testify than Representatives. Luckily, C-SPAN doesn’t care if the Reps don’t care and they broadcast the proceedings. Several things struck me, but none more than the tone of the Representatives that did bother to show up. They acted like they were there to talk about themselves, not the issue and certainly not the people they have been elected to represent. Sure, maybe it was laid back because, as Rep. Barney Frank pointed out, Friday sessions are poorly attended, but aren’t they having the session to learn more about an issue? Is this how they treat all their legislation? With something as important to students and the future of our country’s higher education at stake, are they going to invite the top experts to come testify and then ignore them because it’s a Friday?

Every issue that comes before Congress should be treated as important and afforded respect. There’s a reason it’s made it to Congress even if it’s bad legislation like the STAR Act. These issues have meaning and Congressional decisions will have an impact on our lives. Certainly some of those decisions will have less of an effect than others. Some might not affect us for decades. The Congressmen who voted based on their party or their cronies or on their publicist’s advice will be long gone and we will be trying to clean up the mess from their decisions. Please, tell your Congressmen that you are watching them and that you care about the issues!

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 wish Congressmen would vote based on what they say they believe and what they say they’ve learned. Barney Frank recently said he learned long ago not to legislate trying to protect people from themselves, but to protect them from other people. That sounds good as a sound bite, but then he votes to take choices away from students and universities. Is he trying to say students are trying to take advantage of the FFELP? Have you ever met a student who said they wished they could be in more debt because it’s so fun and easy to get loans? I really don’t think there are students out their competing to see who can graduate in the fewest years with the most debt.

Here’s the thing – none of the proposed legislation addresses the private lenders beyond their participation in the FFELP except to labor them with more administrative costs that will lead to higher interest rates on non-guaranteed loans. It doesn’t eliminate the need for them. It doesn’t keep them from offering loans to cover the costs the FDLP won’t. Who does Congress think they are protecting people from if not “protecting” them from making the wrong decision? By wrong decision I mean not making the choice certain players in the government want you to make. If Congress really wanted to protect us poor, unthinking citizens from the evil of the world they would look into why college has become so very expensive.

What I’d like to see is Congress protect us from Congress. I’d like to see an oversight committee that isn’t short sighted. I’d like to find out how new legislation will be implemented when the old legislation isn’t being enforced. I want to know why certain Senators have such a grudge against the FFELP. I also want to know if these Congressional Supermen will be wearing capes while they run around trying to rescue us from the educational finance disaster they are creating.

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.