The Billings Gazette ran http://www.billingsgazette.net/articles/2007/08/04/opinion/guest/50-standards.txt
on August 4 regarding the way FFELP lenders work in Montana. It clearly explains the good that Montana’s FFELP lenders have done, and it illustrates just how backwards and damaging the proposed legislation will be.

To start, local lenders make most of Montana’s FFELP student loans. Students invest locally by borrowing from local lenders. By itself, this is a tremendous benefit of the FFELP program; students borrow from lenders they know and trust. They build a relationship with a lender that can last a lifetime.

The Montana Higher Education Student Assistance Corporation (MHESAC) buys eighty-five percent of these local loans for loan servicing. This non-profit company operates in Montana for the benefit of Montana’s lenders and student borrowers. By buying loans from the local lenders, MHESAC provides additional funds that local lenders can re-issue to new student borrowers. Again, this is another beautiful benefit of the FFELP public-private partnership.

MHESAC lends only to the residents of Montana who also attend Montana’s higher education institutions. MHESAC doesn’t want to service the world; they only want to do what’s best for Montana’s college students. Here is another powerful illustration of the benefit of the FFELP programs and how they benefit their own communities.

MHESAC’s products provide substantial benefits to the borrower: fee-less FFELP student loans, principal forgiveness, and interest rate reductions. According to the article MHESAC has provided more than $1.5 billion dollars for Montana’s college students and more than $34 million in borrower benefits since 1980.

How could this possibly get any better? The Student Aid Foundation works with the MHESAC to provide day-to-day loan servicing to Montana’s student borrowers. The SAF has given more than $106 million in grants and other benefits to Montanans since 2000. SAF’s grants have gone to students in need and community groups; and have provided funding for outreach programs, financial aid nights, debt management programs and also fund the Montana Career Information System on the Web, and the Montana College Goal Sunday programs.

Once again, Congress has gotten it all wrong! Congress has the nerve to accuse FFELP lenders just like the MHESAC and SAF of profiteering at the expense of borrowers, and Congress wants to destroy programs like this. Montana lenders, like many others throughout the country, have taken the money given to them through the FFEL program and have invested it in their states and their communities in ways that benefit everyone.

Contact your Congressman or Senator immediately and tell them to stop their shameful persecution of FFELP lenders like MHESAC and SAF, that their profits to benefit their local communities.

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