One of the most positive aspects of the current student loan program is the flexibility it offers. Students whose financial aid package does not cover their costs can borrow funds to make up the difference. Additionally, students who want to pursue advanced degrees are not limited by lending caps.

All this will change, however, if the measures passed by Congress are signed into law. Tuition at our nation’s universities is soaring, with no end in sight. Congress has been irresponsible, ignorant or just plain apathetic about these costs for the past 15 years. Not once during that period did they adjust the Federal financial aid caps. Instead, private lenders were called upon to fill in the gaps that Congress’ inattention created.

Congress has quite ably demonstrated that they can walk away from the whole higher education funding issue. They’re quite happy to let the matter sit while the cost of tuition goes through the roof. To accommodate the rising cost of tuition, Congress did absolutely nothing of note in the past fifteen years. They placed the burden of tuition increases squarely on e backs of the student borrowers.

The FFELP lenders, on the other hand, developed flexible, fair and generous loan products to assist students in finding the money they needed to attend college. The FFELP lenders were ready to pick up the slack when Congress nodded off. Now that an election is looming, Congress has once again awakened and your representatives and senators want you to know that even as they slept, they felt your pain. Really, they did.

The program that Congress has authorized will eliminate choice in lending, and will also take the flexibility, innovation and generosity of the FFELP lenders along with it. Many of the FFELP lenders who participate in the program now will no longer be able to write student loans. The lenders you’ve come to know and trust will be out of the program. 

Industry analysts believe that only a few large lenders will survive. Are a few large lenders a good substitute for many smaller ones? The smaller lenders are the ones who most keenly feel the need to compete. They have to distinguish themselves and their products to compete effectively against the larger lenders, who have the benefit of volume. Once you remove the small lenders from the program, you’ll have a few large lenders who don’t need to compete for business, and the Federal government, which wouldn’t know competition if it came up and introduced itself.

A non-competitive student loan industry is not in the best interest of consumers. Call, write or email your representatives in Congress and tell them that small, competitive lenders are the key to a successful student lending program.