It’s very clear that punishing the FFELP lenders isn’t going to reduce the cost of tuition one bit. After all, lenders don’t set the cost of tuition. So what’s behind the big cost increases and why isn’t anyone doing anything about it? In his paper, The Real Cost of Federal Aid to Higher Education, Dr. Richard Vedder, Director of the Center on College Affordability and Productivity, and author of Going Broke By Degree: Why College Costs Too Much has some ideas about why a college education is so expensive.

Dr. Vedder lists twelve primary causes for the uncontrolled increase in college tuition, many of which could be addressed by changes in the governance structures of public universities; changes in the level of accountability and transparency of these institutions; and changes in the way money can be spent inside public institutions. All of these things are within the control of state legislatures. Congress can exert pressure for change on the state legislatures, but they’ve chosen a whipping boy instead.

Have the Congressional Democrats done any investigation into the causes of rising college tuition? No. Is punishing FFELP lenders for the cost of college tuition going to lower college tuition? No. Congress views the interest rates on student loans to be the only measure of control they have over the rising cost of college tuition. Equally unfortunately, student loan interest rates are a drop in the bucket compared to the 86 percent increase in tuition costs since 1991-92. Have student loan interest rates gone up 86 percent? Nowhere near it. Loan rates fluctuate, but Congress carefully controls those. In some cases, the interest rates have gone as low as 3.5 percent. While the costs are spiraling out of control, student loan rates have held steady or dropped. Student loan interest rates aren’t the problem!

What issues do contribute to the frightening increases in college tuition? Lack of public accountability; lack of motivation to improve; giant compensation increases for senior administration and faculty; lack of incentives to control costs; poor accounting controls; and weak governance structures at the public universities all contribute to an environment where tuition costs creep unchecked.

Instead of addressing these issues, Congress is beating up student loan lenders. Who’s holding Congress accountable for its inaction on this issue? Call, write or email your Congressional representatives today. Tell them that you want more transparency and accountability in higher education as a means to deal with the real causes of student debt.

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Congressional Democrats want you to believe that they really want to help students reduce the cost of a college education. Maybe they do, but if you look at their actions, nothing they’ve done so far reflects that.

The cost of tuition has increased by 86 percent (adjusted for inflation) since 1991-92. Why? Good question. Colleges and universities aren’t saying, and no one is really addressing that issue, least of all, the Congress. Unfortunately, the cost of college tuition is the primary component of the amount a student must borrow. Congress just doesn’t want to deal with the real issue.

What’s worse is that evidence now suggests that increases in Federal financial aid will only push college tuition even higher. Economist Richard Vedder shows in his report entitled The Real Cost of Federal Aid to Higher Education shows that the more money a student receives for college, the higher the tuition rate will climb. Why? Simple economics dictate that the more someone can pay for something, the higher its price will increase. Providers, in this case, higher education institutions, want to maximize their dollars. When students can spend more freely on education, colleges and universities will raise tuition. Dumping even more aid into the system will only raise tuition more. Rome is burning, and Congress is doing nothing to stop it.

It is crucial for Congress to stop the spiraling increases in tuition costs. If Congress wants to reduce the cost of a college education, it needs to fight the fire at its source. Student loan lenders are like fire hoses in this battle. Instead of concentrating on the source of the problem, Congressional Democrats are wasting time and money getting mad at the fire hoses for not being able to put out the fire. This childish approach, which helps no one and accomplishes nothing, ends up costing taxpayers and students more money. Every semester that goes by without definitive action by Congress only makes the problem worse.

The Congressional Democrats have yet to explain their reluctance to tackle the real issue. Call, write or email your representatives in Congress now. Ask them when they plan to address the real issue of the cost of a college education and find out why they’re so reluctant to act. Remember, it’s the cost of the tuition, not the interest rate on the student loan, that makes the biggest impact on the money a student owes when he or she leaves college.

Tell your representatives to stop sitting on their hands and start addressing the real problem: the uncontrolled rise in the cost of college tuition.

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As part of the FFELP, Congress promised lenders a certain rate of return in exchange for providing funding, loan servicing, collection and program participation. One program feature lets borrowers consolidate all of their variable interest rate loans into a single, fixed rate loan. It’s a very good way for borrowers to save money interest, and it reduces the overall cost of the loan to the borrower.

Congress is very angry about that. They really didn’t want borrowers to consolidate their loans and save thousands of dollars over the life of the agreement. Why would Congress not want students to save money on their student loans? Isn’t reducing the cost of a college education what the Congressional Democrats say they want? And isn’t that just what they promise to do with the CRSA?

Congress is angry because these loan consolidations, which collectively could save borrowers billions of dollars in interest, could also cost the Federal government the same amount. Remember, as part of the FFELP, the Feds agreed to provide program lenders a certain rate of return on student loans. If interest rates rise substantially, the Federal government could be on the hook for a lot of money.

Now, after borrowers consolidated 2.2 million loans at rates as low as 3.5 percent, Congress isn’t too happy about this deal. The lenders did what Congress asked them to do under the terms of the agreement - putting out billions of dollars in student loans - but now Congress wants to change the rules. And it’s going to start by punishing the student loan lenders who have participated in this program for more than 40 years. Keep in mind that the FFELP lenders didn’t author the deal. Congress did.

Dear students, your Congressmen and Senators don’t want to invest in your future. They don’t want your tax dollars to work for you. (They just want your tax dollars.) They want you in their program, where you operate by their rules, and don’t get to choose a lender who will consolidate loans at a low interest rate for your benefit. When you look out for yourself, you’re hurting the Federal government, and Uncle Sam just isn’t going to put up with that anymore.

FFELP lenders operate within the program rules established by Congress and the Department of Education. Everyone knew about, understood and agreed to the loan consolidation feature. But Congress wants to change the deal… your deal. It’s curious that the proposed CRSA reduces the interest rate on student loans to 3.4 percent by 2012. If Congress put itself at risk the first time interest rates fell to 3.5 percent, won’t the same thing happen to the Feds under the new deal? (Yes.)

Tell your representatives in Congress to stick with the plan they wrote and agreed to. Hold them responsible for protecting your right to finance your college education in the way that best benefits you.

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“There are three kinds of lies: lies, damn lies and statistics.” – Benjamin Disraeli, via Mark Twain.

Indeed, the Congressional Democrats want to use statistics to slant your view of the “crisis” surrounding student loan debt. They will tell you that educational spending by the Federal government has nearly tripled since 1991, from $35 billion to $95 billion, with most of the increase going to financial aid for college students.

What they won’t tell you is that student loan lending by private lenders has also jumped to cover the gap between Federal financial aid spending and the cost of a college education. Between 1994-95 and 2005-06, unsubsidized Stafford loan lending increased nearly 200 percent, and PLUS loans for parents increased 175 percent. While the number of Federal dollars applied to education has increased, the percentage of Federal money hasn’t kept pace with either costs or private lending. Federal money is a shrinking piece of the student financial aid pie. And subsidized student loans have taken the biggest hit, falling nearly 20 percent. Is the increase in Federal education spending a lie, damn lie or a statistic?

Congressional Democrats will tell you that Federal student aid spending has increased from $9.6 billion to $48 billion since 2001.

What Congressional Democrats won’t tell you is that much of the new spending is the result of loan consolidations. It’s not “new” spending on new students and it doesn’t represent an increased commitment on the part of the Federal government to fund education. It’s an effort to help existing loan holders make their obligations. In fact, analysts expect Federal spending on student aid to level off at about $25 billion. Lie, damn lie or statistic?

Given that Federal spending on education hasn’t kept pace with the increase in the cost of education, and is expected to level off at $25 billion, a figure well below the $48 billion figure they’re pointing to, what is the likely outcome of dumping millions of new participants into a program that has already fallen well behind the pace set by increases in the average cost of college and is expected to cap spending on aid at about $25 billion? Many more participants, much less money to go around. Who’s going to make up the difference? Lie, damn lie, or statistic?

Congress can point to an increase in the number of dollars they spend on education, but they can’t cover the fact that their spending hasn’t kept up with the increases in cost for a college education. The Feds are woefully unprepared to deal with an increased number of participants in Federal aid programs because there are fewer aid dollars to go around.

If you don’t want the Federal student financial aid system thrown into chaos, contact your representatives in Congress now and tell them you prefer to leave the FFELP program intact.

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Congressional Democrats criticize the FFELP lenders for charging high interest rates and soaking “billions” of dollars out of the Federal government each year. This is absolutely untrue. Let’s take a look at what you – the taxpayer – get for your money through the FFELP.

First, the FFELP has provided a highly reliable program over the past 42 years. The program works virtually flawlessly and students and their families can count on it. The FFELP lenders have always been there, offering not just loans at a reduced interest rate, but also efficient payment processing, streamlined, understandable loan application procedures, timely information for student borrowers, accurate billing, payment crediting and interest calculations. Eight out of ten borrowers use FFELP lenders. They value the reliability of the FFELP programs – not just for funds availability but also throughout the loan process.

The FDLP can’t offer any of these things. Currently, former FDLP borrowers are suing the FDLP for wrongfully overcharging them on paid-off loans. The FDLP loan processor’s system was so overwhelmed one year that the entire system failed, which delayed payments for so long that Congress had to pass emergency legislation to deal with the problems.

Second, the FFELP lenders have worked long and hard to educate borrowers, and help them avoid defaulting on their loans. In the past fifteen years, the FFELP lenders have eliminated more than 75 percent of the defaults by working closely with borrowers and supporting them with education programs and other assistance when their loans enter repayment.

The FDLP has done none of this, and has a default rate nearly three times that of the FDLP. The FDLP program itself is $16 billion in debt. Tell me, what can an organization that overspends its budget by $16 billion dollars teach borrowers about avoiding default?

Third, the FFELP loans to students and parents cost less than the FDLP loans. FFELP lenders often help borrowers by offering discounts on fees and reducing interest rates. The law does not require these discounts. Lenders offer discounts to compete against other lenders. It’s a standard practice in lending, which you’ll find on all sorts of loans. It’s a way for lenders to encourage choice and reward good, loyal customers.

Uncle Sam doesn’t do that. There are no discounts because there’s no need to compete. There’s no benefit to the FDLP to do that and they don’t really care about what benefits the borrower.

Let your representatives in Congress know that you want to encourage competition among lenders. You want efficient loan processing, lending practices that reduce default rates and borrower education. You don’t want to be stuck with yet another government program that was awarded to the lowball bidder and that doesn’t benefit you.

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The so-called Sunshine Amendment deserves a little “sunshine” of it’s own. The Sunshine Amendment prohibits lenders from offering inducements to secure student loan applications. If you accept the premise that the Sunshine Amendment is good, then you’ll quickly find that the STAR Amendment runs afoul of it. Why? The STAR Amendment offers colleges and universities inducements to steer student loan applicants into the Federal program.

Yes, indeed. The STAR Amendment violates the terms of the Sunshine Amendment. The STAR Amendment mandates exactly what the Sunshine Amendment prohibits. Talk about two-faced. Congressional Democrats are running around like Keystone Cops trying to get something (anything!) done, and the best thing they can come up with are two amendments that would make the Mad Hatter proud!

If the law prohibits FFELP lenders from offering inducements to colleges and universities, parents and borrowers, the FDLP should operate under the same restrictions. Fair is fair, right? Apparently for the Congressional Democrats, “fair” means different things, depending upon whom you’re talking about. If you’re talking about FFELP lenders, offering incentives to students, parents, universities and colleges to participate in your programs is “unfair.” If you’re the FDLP, then those kinds of inducements are not just “fair”, they’re required by law.

And just in case the whole fair/unfair thing isn’t stacked well enough to favor the FDLP, the legislation also mandates that schools participate in the FDLP. Somehow, it is “fair” to restrict students, parents and institutions to dealing with one lender: the Federal government. This program will trap all student loan borrowers. You won’t have a choice. No lenders will compete for your business because that kind of competition would be “unfair.” The law will prevent lenders from rewarding their customers with “inducements” like interest rate reductions for on-time payments, electronic payments and automatic payments, because those would be “unfair.”

Apparently, the Federal government doesn’t have to play by the same rules it wants to impose on private lenders. Instead, Congressional Democrats want to force people to use their broken, insolvent program, and if it means they have to take away your right to choose among lenders, then that’s exactly what they’ll do.

Tell your representatives in Congress that “fair IS fair.” You want a level playing field and you want choice in lending. Once this program is gone, it will be too late to complain. Speak now, because this is what you’ll be stuck with if you don’t.

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John was a smart, motivated high school senior with great grades and test scores. He graduated in the top ten percent of his class and several prestigious universities offered him a spot in their freshman class. When people asked what John was going to do after high school, he shrugged. Maybe he’d go work with his dad at the local widget factory. Maybe he’d try to get an apprentice spot at the local union hall. He had to register with the Draft Board, but he could always voluntarily join the Navy. Or the Merchant Marine, the Coast Guard or the National Guard. There were lots of opportunities for John. College just wasn’t one of them.
Sound hokey? This is the way things were prior to 1965 and the advent of the FFEL Program. With a high school education, a good student could almost always find a factory job, or work as an apprentice. The Armed Forces were drafting young men to fight in the war, but young men could voluntarily join and perhaps draw a better assignment. Officer School was a possibility for candidates like John. Only 8 percent of America’s young men and women graduated from college. College was reserved for the rich.

What made the difference? The FFEL Program provided students with the money to go to college. It wasn’t a hand out, but it was the break that let millions of American kids go to college. The Federal government was willing to invest in America’s youth because that kind of investment was good for the country.

That kind of investment is still good for the country, but Congress plans to change that, with legislation that will virtually destroy the student loan program. This legislation will hit hardest for the students who don’t qualify for subsidized loans, and who cannot independently afford college. Many will simply forego college altogether. These changes will block promising students from realizing their college plans.

The negative implications don’t stop there. America’s employers will recruit foreign graduates to work here while our own young men and women sit on the sidelines because the Congressional Democrats won’t invest in their future. Don’t believe for one minute that foreigners are filling only the unskilled, low-paying positions that American workers don’t want. We already face shortages of students with appropriate math and science skills. Overseas workers already fill many high-paying, high-skill jobs in medicine, nursing, engineering, and computer science.

Tell Congress to invest in the future of America by supporting the FFELP and America’s kids. Call, write or email your representatives in Washington, DC and tell them you don’t want to return to the 1960’s. The means to a college education should be available to everyone.

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Hollywood filmmakers exploit a theater patron’s good nature whenever the moviegoer sits down to watch a film. The moviegoer gives the filmmaker the benefit of the doubt, and in return, the filmmaker tells a good story. Filmmakers call this phenomenon the “suspension of disbelief.” Movie watchers “forgive” an unlikely storyline to give the filmmaker a chance to win over the audience.

In some ways, the FFELP gives lenders the same chance to “suspend their disbelief” for a person with no job, little money, no savings, no assets and no credit who seems “unlikely” to pay back a large debt. Instead of a good story, the FFELP lender ends up with a good, well-educated, responsible customer who repays his debts, and at the same time, makes it possible for the lender to offer the same opportunity to a new borrower.

Congressional Democrats have other plans, though. Drastic changes to the FFELP, like those proposed by the College Student Relief Act and the STAR Amendment will force honest participating FFELP lenders out of the program. That’s just the plain, unvarnished truth. Banks, credit unions, and other private lenders who are now willing to lend money to unqualified applicants because the Federal government offers its guarantee, won’t continue to grant credit to people who wouldn’t normally qualify…like students. That’s the reality of lending. Lenders offer loans to people who can show that they have the means to pay back the money. People with no job, little money, no savings, no assets and no credit need not apply. Welcome to the real world, kids.

Now, that doesn’t mean there won’t be private lenders willing to make loans. It just means that lenders will apply different borrowing policies to student applicants. After all, students will be “high-risk” borrowers. Lending institutions often charge higher interest rates to riskier borrowers. The legislation opens the door for unscrupulous and predatory lenders, who will fill in the “gaps” left by honest lenders who have been forced out of the program. Student borrowers should plan on high interest rates, risky and uncontrollable loan terms, a higher probability of default and damaged credit if they can’t start making payments immediately on student loans. There won’t be any forbearance, or delay of payment while students are in school. There won’t be any grace period after college while borrowers find jobs and get themselves established. This is the grim reality that awaits students who are desperate for money to pay for college, and choose to take their chances with these risky loans.

If you want reliability, stability, and loan terms that are appropriate to your ability to pay your loans, call or write your representatives in Washington, DC right away. Tell them that you value the stability and reliability the current FFELP provides.

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Congressional Democrats pose a “solution” to the “student loan crisis” that isn’t really a solution at all. Their “solution” pays colleges and universities to steer their students away from a highly successful, measurable program that’s helped more than 50 million Americans achieve economic prosperity and financial independence, and into a broken-down, $16 billion-loser that can never rise above its structural insolvency, needs annual bailouts measured in billions of dollars, and inflates the national debt every year it operates.

This legislation, which affects only subsidized student loans, will have the effect of chasing private lenders out of the program altogether. Once the private lenders leave, where will the students who don’t qualify for subsidized student loans go? The options are all poor. In the next few days, I’d like to examine potential options for covering the cost of college without the help of honest private lenders in today’s FFELP.

Parents can still borrow money to pay for their children’s college educations. True. (They may have to.) Parents in their forties, fifties and sixties will borrow money, cash in investments or insurance policies, or spend down their savings to help their adult children get through school when they should be saving for their own retirements. Saving for retirement and seeing children graduate from college shouldn’t be competing priorities, but for many American families, they will be.

Parents can’t make a worse financial decision than paying for college by reducing, borrowing against or spending their retirement savings. Older adults risk developing age-related health problems, a diminishing ability to work full-time, permanent job losses, economic instability from a spouse’s death or catastrophic illness, and forced retirements. Older adults also have less time to make up the lost economic power of the retirement savings they divert for college tuition. To offset the economic loss, parents may put the remainder of their savings into more risky investments when they should be looking at lowering their risk as they approach retirement age.

If parents remain healthy and employed, they may have to delay retirement, or retire with less money. Some parents may never get the opportunity to retire. For many people, the days of retiring at 65 are gone. Parents are working into their seventies to pay off mortgages and other debts, pay living expenses and offset the burgeoning cost of healthcare. Meanwhile, their adult children learn nothing about the realities of developing good credit and good spending habits.

If this isn’t the reality you want for yourself, or for your parents, call or write your representatives in Washington DC now and tell them to fix the student loan crisis by making college more affordable instead of taking away options.

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The Congressional Democrats say the rising amount of student loan debt is a real problem. That’s a thin disguise for the real problem: the cost of a college education has risen much faster than the rate of inflation. That’s the real problem. And the College Student Relief Act and the STAR Amendment are dysfunctional measures that don’t address the real problem.

Congressional Democrats point the finger at the lenders and say “The lenders are charging high interest rates, and students are coming out of college with $40,000 in debts. Therefore, the lenders are the problem.” Student loan debt and the cost of borrowing money are two different things. The principal amount of a loan is a much larger component of student loan debt than the interest rate is. The more a student has to borrow, the more debt s/he will accumulate. Student loan lenders don’t even control the interest rates on student loans. The FFELP student loan rate is legislated by Congress. Congress complains about the “high” (read: sub-prime) student loan interest rate, yet Congress sets the maximum student loan rate. Congress tells student loan lenders what to charge.

Congressional Democrats could most effectively reduce student loan debt by reducing the amount of money a student has to borrow in the first place. Cutting the interest rate on loans that are already sub-prime may knock a few dollars off of the loan’s lifetime value, but it does nothing to attack the size of the loan’s principal, and therein lies the problem.

If the Congressional Democrats wanted to attack the real problem, they would be working night and day to reduce the cost of college tuition. They would be modifying the limits on the Pell Grant program, and providing more direct aid and grants to more students. Instead they concoct defective legislation that unfairly blames and penalizes lenders, and large cuts to state subsidies, which force states to cut subsidies to their colleges and universities, and force colleges and universities to pass the losses on to the students.

The lender, who has no control over the cost of tuition and has no influence on the minimum cost of borrowing money, is at the end of this chain reaction. Congress has the power to make positive changes that will reduce the cost of college and yet, they choose to point their fingers at the one industry capable of delivering a consistent and workable solution for the problems Congress has created.

Please, take a moment to tell your Congress representative and Senator to solve the real problem by finding solutions that reduce the cost of college tuition.

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The plan to “remodel” Federal student loan subsidies calls for $18-$19 billion in cuts to the subsidized student loan funds. Worse, money that had been used to subsidize student loans will be redirected to the Federal Direct Loan Program’s “deficit reduction,” which is $16 billion in debt through the government’s own mismanagement. By itself, that begs the question: “Why is this money being directed toward deficit reduction?” Good question. The proposed legislation increases Federal spending and the Congressional Democrats are trying to cover that up.

The same government that managed its own direct lending program directly into a $16 billion hole proposes to gut the loan program that American families have trusted for more than 40 years – the same loan program that has tripled the number of America’s college graduates since its inception.

This exemplary program, which has helped more than 50 million young Americans achieve their college dreams, will be effectively replaced with a system of “subsidy auctions” where lenders are supposed to bid on the lowest subsidy they’ll accept to fund college student loans. This “auction” is not in place right now. The Feds have never even tried this on their own direct lending program. If this plan is put into place, we run the risk of lenders abandoning the subsidized student loan program altogether. Without private lender participation, the cost of student loans will rise substantially. In fact, the Congressional Budget Office estimates the program will cost $7 billion dollars annually.

Where will that leave college students and their families? Parents plan and save for years to send their children to college. They rely on the availability of student loans. And the program works. The vast majority borrowers repay their student loans when they graduate. The current default rate on student loans is about 5 percent, the lowest it’s been in years. FFELP lenders experience very few defaults. Why? Lenders work with borrowers very closely to give repayment terms that borrowers can manage easily over a workable period of time. They also educate borrowers at each stage of the process, so borrowers know what to expect when their loans enter repayment. Once they’re finished repaying their loan, the borrower and his or her family continue to reap the benefits of a college education.

Under the new proposal, students who borrow money from the Federal Direct Loan Program will repay their student loans, and then, because the money for the loans came from the sale of Treasury bonds, those same borrowers who paid back their own loans can then pay for everyone else’s. That’s right! Under this plan, the Democrats plan to fund student loans through a perpetual cycle of deficit spending.

The folks in Washington don’t seem to understand that they can’t spend money they don’t have, and yet, these are the same people who think they can do a better job of teaching young people the right way to borrow money. They’ve got the borrowing part down pat – it’s the payback part they’re unfamiliar with. That’s understandable. Perpetual borrowing against “the full faith and credit” of the Treasury is how it’s done in Washington. Our Congressmen and Senators just don’t understand that the magical properties of deficit spending don’t work very well outside the Beltway.

Please, take one minute to call or write your senator and your representative. Tell them in no uncertain terms that you do not want to replace the successful, tried-and-true student loan programs we enjoy today with a bloated, waste-filled, expensive government knock-off. If you hope to find affordable college tuition in your future, please act now.

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.

Supporting lunatic legislation that favors the FDLP (Federal Direct Lending Program) makes absolutely no sense, in any way I can fathom. The FDLP inefficiencies are so glaringly obvious to any sane taxpayer who researches the issue, that it should put the issue to rest immediately.

Unfortunately, however, the congressional wolves are leading the student loan sheep astray—those who fail to question the media and buy the political rhetoric being espoused by politicians who are playing for power and position.

I hate to be so direct. On the other hand, why not?

People: It’s time to think for yourselves. How does entrusting almost 100 percent of the student loan volume to the inefficient, ineffective FDLP lead to cutting college costs?

Real simple: It doesn’t. And if you believe anything else, I’m not so sure you belong in college anyway.

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.

The FFELP has a long history of educational lending. In the late-80’s and early-90’s, many student loans were in default because lenders lacked credible means to collect student loan debt. The default rate was becoming problematic and was threatening the stability of the program for everyone.

To help reduce the default rate, the FFELP constructed numerous educational programs for borrowers that include workshops and presentations for prospective borrowers; awareness-education for parents and students who are just beginning to consider their means for paying for college; assistance for prospective borrowers whose first language is not English – offered in their native languages, so they clearly understand the program’s operation; educational resources, including online forums, chat rooms, telephone hotlines and video presentations; on-campus programs, counseling and information for students; intervention programs to help borrowers avoid default; outreach to unemployed persons, to provide them with information about how they can attend college; millions of dollars in need-based scholarships that require no repayment; support for college and university financial aid offices to help their personnel understand the FFELP programs; and programs that help high school students prepare for college.

The master goal of these programs is simple: to help the college student succeed. The sharp decline in the default rate is great evidence that FFELP lenders have been responsible stewards of this program. The vast majority of student loans are in timely repayment, which reduces costs for the lender, the Federal government and ultimately, the taxpayer. And just who are FFELP lenders? Many FFELP lenders have names student borrowers will recognize, because students borrow money from their local banks, credit unions, and community banks, as well as national lenders, non-profit lenders, and guaranty agencies.

Educating borrowers on the mechanics of borrowing and repayment has reduced the default rate to near-record lows. More students than ever choose to pay off their loans responsibly, building good credit and ensuring funding availability for new borrowers at the same time. The program works. Borrowing through the FFELP is growing substantially.

But student loans are only one part of the picture. Scholarships and grants, college savings plans, public and private loans, work-study and other forms of aid all combine in a student’s financial aid package. When one element in the package destabilizes, the other elements have to make up for the shortfall. Scholarships and grants have limitations and they can be hard to find. College savings plans may not cover as much of a student’s expenses as they need to. Work-study is need-based aid, and when more students need aid, there are fewer work-study dollars to go around. Some part of the package has to be able to take up the slack. Currently, that’s the role of student loans. Right now, private lenders can easily increase the amount of aid a student receives, to cover shortfalls in other financial aid elements. Under the new Federal program, this option won’t be as easily available. So what will take up the slack? The borrower will be responsible for the difference between the financial aid package and the bottom line. The direct cost to the student and his family will increase under the College Student Relief Act and its amendments.

Please, take one minute to call or write your senator and your representative. Tell them in no uncertain terms that you can’t afford to backstop the Federal government’s inability to support the student loan program. Please act now.

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.

The College Student Relief Act of 2007 doesn’t do anything to relieve the high cost of college and university tuition. College tuition has risen faster than the pace of inflation, and causes students to borrow more money to get through college. Instead of finding a solution for the real problem, the Democratic Congress has chosen to attack the only successful solution to the problem that’s been developed in the last forty years.

The College Student Relief Act of 2007 doesn’t do anything about increasing the Federal limit on Pell Grants. In 1985-86, Pell Grants covered 60 percent of the average tuition, room and board costs at four-year public universities. In 2002, Pell Grants covered 42 percent of tuition, room and board costs. In 2005-06, Pell Grants covered only one-third of these costs. The value of the Pell Grant is dropping and has been for twenty years. If the Congress were serious about improving student aid, they’d start with improving Pell Grants.

The College Student Relief Act of 2007 doesn’t do anything for students who have already graduated and are repaying their loans, and doesn’t do anything for students who take out unsubsidized loans. No matter how you look at it, this measure doesn’t address the real cost of rising tuition and costs at America’s colleges and universities.

The College Student Relief Act of 2007 appears to reduce the interest rate on student loans, but this is a temporary reduction. The bill makes no provisions for any loans past January 2012. Worse, Congressional Democrats claim that the FDLP is cheaper to administer than the FFELP. The truth is that the administrative costs of the FDLP are shoved off on the universities and colleges who participate in the program, because the Federal government won’t reimburse the participating institutions for this. So, how do you suppose the colleges and universities recoup their administrative costs? They raise tuition and fees for their students, who in turn, have to borrow more from the Federal government to pay their bills. There’s no real cost savings here. Not to the taxpayer. Not to the borrower. Not to the universities. But I’m sure that the half-baked numbers in the Congressional Democrats’ shell game appear to be better. In the end, it all comes out of the taxpayer’s pocket. There is no savings to the taxpayer or to the borrower in this program.

The College Student Relief Act of 2007 and its amendments don’t address the high default rate among FDLP borrowers, which serves to increase the cost of student loans to the taxpayer. Currently, the FDLP default rate is predicted to fall between 12 and 15 percent in 2007. What will the FDLP do to ensure that the default rate is reduced? If they plan to continue doing what they’re doing now, you as a taxpayer can get your wallet out right now because we’ll be heading back to the high default rates of the 1980’s and 1990’s.

Poor management plagues the FDLP. In March 2007, the Department of Education, which oversees the Direct Student Loan program, was sued by Direct borrowers who claimed that the Fed has been charging late fees on loans that have already been paid off. Further, an uncorrected “drafting error” in the Higher Education Reconciliation Act meant that PLUS and Stafford borrowers in the FFELP paid higher interest rates on loans than did participants in the Direct Loan programs. These kinds of bonehead errors give one reason for pause. Do we really want to place our trust in a program that can’t properly manage its default rate, and carelessly overcharges borrowers on late fees and interest rates?

If you don’t to be victimized by the careless administration of a student loan program, take one minute to call or write your senator and your representative. Tell them in no uncertain terms that you want accountability in well-run student loan program. Please act now.

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 Kennedy says that the proposed changes to the student loan program “will help reverse the crisis in college affordability.” Nothing could be further from the truth. The College Student Relief Act and its associated amendments do nothing to change the affordability of college. At best, the plan is a collection of “survivor benefits” for those who make it through a degree program. In fact, the College Student Relief Act of 2007 will produce the exact opposite effect on college affordability, and the borrowers who most need assistance with the cost of college will bear the brunt of the devastation.

If Senator Kennedy, and his Congressional colleagues were truly interested in making college more affordable, his plan would focus on increasing funding for the colleges and universities themselves, allowing these institutions to maintain or even reduce the cost of tuition to students. His plan would raise Pell Grant limits and other direct grant aid to students. His plan would attack the causes of the massive tuition increases at colleges and universities across the country. His response? The Democrats are working on those things, and they’ll come up with a plan for them later. “Later” is just like “tomorrow”: - it’s always on the way, but it never actually gets here.

Colleges and universities base their tuition on the number of students who enroll. Under the proposed student loan program, as prospective students find fewer affordable college opportunities, tuition costs will actually increase further, forcing students to borrow even more to attend college or forego college altogether. Senator Kennedy’s plan discourages choice among lenders for students, and redirects people to an already-broken program that most universities refuse to participate in.

Senator Kennedy’s plan does not address the holes and gaps in the Federal Direct Loan Program. Today, this program has a structural deficit of more than $16 billion, and that’s without trying to funnel the majority of student borrowers through the program. How big will the program deficit get under the Senator Kennedy’s plan? It’s hard to say, but the plan earmarks at least a billion dollars each year to “deficit reduction.” Kennedy’s plan needs a billion dollar Band-Aid bailout each year to correct its “insolvency-by-design” flaws, and over time, the taxpayer will absorb the mushrooming cost of the Billion-Dollar Band-Aid. Would you buy a jug of milk with a hole in it? Would you buy a car with a hole in the gas tank? Would you buy a house with a hole in the roof? Then why buy Senator Kennedy’s plan? It has a hole in it that will NEVER go away.

More than 50 million Americans have benefited directly from the FFELP programs that Senator Kennedy proposes to gut. Unlike Senator Kennedy’s family, not every American family has the means to pay for college education out of pocket. In the 42 years the FFELP programs have been in existence, they’ve ensured America’s prosperity by investing in its young people. The FFELP programs are one of the truly great public-private partnerships. Senator Kennedy and Co. will destroy one of the true engines of America’s economic prosperity in a feeble attempt to prove to the American voters that the 110th Congress can do something. Unfortunately, it’s not something worth doing.

America depends upon a steady stream of well-educated, energetic, creative young people. Young people must believe that a college education is attainable, and without a solid, trusted, visible and comprehensible mechanism for paying for college, students won’t go, or worse, they’ll abandon the process after having taken on loan obligations. They’ll still need to repay those, but without the benefit of a good job. But don’t expect Senator Kennedy to understand that.

Please, take one minute to call or write your senator and your representative. Tell them in no uncertain terms that you do not want to jeopardize American prosperity by shutting down the engine responsible for tripling the college graduation rate among Americans. If you hope see a prosperous America, please act now.

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.