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.

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.

There has been a lot of talk in the media about financial aid officers’ ulterior motives which cause them to steer students towards certain lenders. Politicians would make you think there is a nation-wide conspiracy by school administrators to give students bad choices while making money for themselves. Oh wait. No wonder the politicians are upset. It’s their job to abuse power for personal gain.

Maybe the real conspiracy here is the politicians trying to distract us from what they are doing to student financial aid. With misdirection skills any Las Vegas magician would sell their linking rings for, Senators are jumping on the reform bandwagon. It sure is lucky they have a fleet of legislation ready to vote into law—almost like they planned it. As long as nobody reads the bills they’ve drafted they can pass them into law and tell the American public how they single-handedly put an end to financial aid corruption. That should make a good sound bite come election time and it could play well on the campus tours.

In fact, Congress must hate competition. The legislation they proposed would give the government a virtual monopoly on student lending. Without subsidies, loan companies won’t be able to offer incentives. That makes student loans more expensive to the customer. The long-term effect would be more debt for the students.

So whose ulterior motives should we be more worried about? I’m not excusing anyone who abuses their position for personal gain, but who poses the bigger threat – the administrator who might cut corners or the Congressman who bases life-altering legislation on political aspirations?

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.

You’ll never guess how I spent my evening. Actually you probably will since I’m posting this on StudentLoanTax.org! My friend Brandi is a grad student. She has several more semesters in her future before she will be qualified for her future profession. Tonight we took a look at her student loan situation. She needs to borrow more money than expected for the fall so she wants to plan ahead. Brandi is doing everything a responsible student should do. And then we did some math…Ouch!

When Brandi’s started grad school her undergraduate loans were deferred for payment. Some of those loans are subsidized and some aren’t so the meter is still running on the unsubsidized portions. Not including this interest she owes roughly $30,000. That’s just for her undergraduate degree. Her graduate degree is going to add up to about $22k in loans. This is when she took a deep breath. $52k.

The Bureau of Labor Statistics says her chosen profession has a median average of $34,820. That’s not the first year average! That median salary includes the big money makers. Her starting salary will probably be more like $30k. The job outlook is good – it shows a general upward trend for growth. The potential earnings are bad – it shows a general downward trend that isn’t keeping up with inflation. Even if Brandi had no other bills, and that’s just not realistic, and spent every after-tax dollar she makes her first year, not even half of her tuition loans would be paid off.

Luckily her current school participates in the FFELP plan and her loan amounts have been increased due to her financial needs. Luckily the bank managing the FFELP loans has some really good incentives. As long as she makes her first 30 payments on time, she will receive a 3% cash rebate on the remaining principle. If she participates in their automatic payment program she can save a third of a percent in interest. That might not sound like a lot, but that’s $200 she doesn’t have to pay back. Any savings in her situation is a definite plus!

So why would Congress want to take these incentives away from Brandi? What could they possibly get out of costing her money? They get short-term political gain in exchange for her long-term financial worries. If our elected officials think that’s what we the people want or need it is time to give them their own education.

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.

Using the same logic as the Senate Education Committee, I’ve come to some astounding conclusions:

Insurance companies should not be allowed to offer discounts to their largest volume customers or to their long-term loyal customers.

Publicly held delivery companies such as UPS, FedEx, DHL, et. al. should not be allowed to handle any packages until the United States Postal Service decides they don’t want that particular delivery.

Even though the orange juice industry has made detailed studies and created products consumers wish to purchase, varieties will henceforth be limited to “from concentrate” only and the government will ensure pulp is kept to 2%. The government will not have to explain how they intend to ensure this or if the 2% is per carton, vat, or general principle.

So don’t worry when your overpriced prescriptions arrive two days late, because your chances of choking on pulp, while trying to stave off scurvy, have been all but eliminated. Thank you Congress!

Of course I’m being facetious, but I think you get my meaning. We want the government to help get mail delivered, keep medications economically available, and protect us from dangerous products, but we don’t want them to take away our options or add needless bureaucratic meddling to industry.

Insurance companies offer discounted plans to large corporations because they are large. More employees mean more policies which means the volume helps disperse the costs. As long as everyone doesn’t get sick at the same time the insurance company can make a profit which will pay for the discount.

Competition has made the Post Office better than ever. Improvements, upgrades in technology, realizing citizens are customers – all brought to you by the beauty of capitalism.

Beverage companies don’t waste time coming out with products they think will fail. They’ve found ways to make multiple products and stay profitable. And while I’m not advocating the FDA step out of the picture, the orange juice people aren’t going to purposely make products that kill their customers.

The current proposed legislation to improve financial aid for college students makes a lot of bad assumptions. The worst of which is the assumption students and lenders don’t know what is best for them. Congress thinks by limiting the options and opportunities for both groups neither will be able to make the wrong choice. No, Senator, it just means they have no choice.

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 hate to get all political about this, and I’m sure Sen. Edward Kennedy is a fine person (OK – I’m NOT so sure about that), but does he really think he can play both sides of the student aid issue and keep what little credibility he has?

He says it is time to stop thinking about profits and start thinking about students. Then he says the FDLP (Federal Direct Lending Program) is more profitable for the government than the FFELP (Federal Family Education Loan Program), so the FFELP must be reformed. Whoa right there, senator. That would mean you think the only way to better serve students is if the government makes a profit? I think Kennedy was seeing just how much fuzzy math, faulty logic, and how many unsubstantiated assumptions he could pack into one piece of legislation.

I agree that students need to be championed. I think you would be hard-pressed to find anyone who would say students and education are not important to the future of America. I bet you couldn’t even find someone in the lending business to say it isn’t important. In fact, lenders have a more direct reason than anyone to support students. Why? Profit. There – I’ve said it, and I refuse to accept the senator’s argument that private profit is a dirty word. Part of the practical reason students go to college is to get better jobs when they graduate. They’d like to get a little personal profit. Who doesn’t?

So Kennedy’s plan would champion students by a) removing their options, b) tying students with governmental apron strings, c) forcing private lenders to reduce staff … How exactly does this help students? It isn’t helping students pay for college, which is what the senator and the other members of the Senate Education Committee should be trying to do. Drafting legislation to make a political point is wrong. Claiming that legislation is in the best interest of an underrepresented group like students is a lie.

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.

Congress is making some promises to students it just can’t keep with the current surge of proposed legislation. The only things wrong with its argument are math (which is based on assumptions, not on evidence) and reality. Let’s face it. How many congressmen actually had to borrow money to pay for college? Do they understand the real world of recent college grads who don’t have family connections to help them?

Our typical student, Greg L., borrows his maximum every year for four years starting this fall. He plans to graduate at the end of those four years. His subsidized loans mean he will not have to pay the interest on the loans until six months after he graduates and he begins paying off the loans.

Freshman Greg receives $2,625 at 6.12% as a subsidized loan for the 2007-2008 academic year.

Sophomore Greg receives $3,500 at 5.44%. He’s thinking of changing majors.

Junior Greg receives $5,500 at 4.76%. He’s too wrapped up with his internship to notice the decrease.

Senior Greg receives his final subsidized loan for $5,500 at 4.08%. He’s trying to figure out how to fit three quarters worth of classes into two semesters.

It’s now 2011 and Greg L. hasn’t slept in a year, but he did manage to graduate on schedule. He borrowed $17,125 in subsidized government loans. He will have to start paying them back in six months. That means Greg will have to find a job, move, get a place to live, and receive enough salary to afford paying back the loans. The clock is ticking!

If our Greg L. is like the vast majority of college students attending a four-year university he has other loans to pay back. He won’t get far with $5,500, even at the most inexpensive public schools. So Greg had to go to some private lenders, and they helped him pay for the rest.

Those private lenders understand that having just graduated, Greg L. is getting started on his own. He’ll be earning an entry level salary and facing many financial needs, so he may not be able to repay the loans right away. That’s why lenders will offer him a student loan consolidation loan that will lower his overall interest rate, lower his monthly payment, and give him a payment schedule he can follow.

So subsidized loan rate changes had zero net effect for Greg L. Nothing. Nil. Technically the rate changes cost him money, as all taxpayers had to pay for the legislation to be drafted, debated, committee’d, re-drafted … well, you get the idea. It’s a shame Congress hasn’t.

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 some food for thought. The U.S. government is dispensing financial advice. At first glance, this may not be all bad. But let’s look at what’s really going on. Recently, the public found out that the government is running a deficit, but not just any small financial shortfall. Try $2.3 trillion. Not million, even billion, but trillion. That’s more than many small countries generate in a year. In my book, we shouldn’t be in business. But let’s put that behind us.

If we are to believe the politicians, they are urging student borrowers to back a program, the Federal Direct Lending Program (FDLP), the government’s own baby, which has been in operation for several years.

Why should we buy this?
On one hand they say that the FDLP is cheaper and better than the Federal Family Education Loan Program (FFELP). The truth is the FDLP has been losing money, almost since it first started. Presently, it’s $16 billion in the whole. If we weren’t using anything but the government’s own creative accounting, by all intents and purposes, the FDLP would be out of business. And rightly so—it should be.

On the other hand, the FFELP has been making money, meeting its demands, and covering its obligations since it started. Not to mention, there are millions of happy, satisfied customers who can point to significant savings as a direct result of being involved with the FFELP.

Can the FDLP say the same thing? Doubtful. Look around. Who is pitching the program besides the politicians and their lobbyists? Honestly, I haven’t heard many testimonials from satisfied FDLP customers. Have you?

Here’s an interesting fact: More than 80 percent of borrowers elect to go with the Federal Family Education Loan Program (FFELP) rather than the Federal Direct Lending Program (FDLP).

Did you ever stop and ask yourself why?
Could it be the far superior customer service, embarrassingly better incentives and benefits, and that the FFELP lender covers your fees?

Or, could it have anything to do with the fact that the FFELP is run like a business (since it IS one and not an arm of the government as is the FDLP), delivering competitive services while running in the black as a result?

And the alternative?
The far inferior choice is the FDLP, a program of questionable value especially when you consider that the program is bankrupt or more than $16 billion in the red. Naturally, this tab is a cost that will be passed on to taxpayers, while at the same time our politicians are telling us that the FDLP is actually cheaper. How does that work? When you figure that one out, please let me know.

Can millions of consumers who yearly take out billions of dollars in loans be so terribly wrong?
Or, might this be another play that somehow benefits the government, while passing along dubious “benefits” to the borrower, benefits that actually do more harm than good (like that $16 billion that will have to be repaid)? …

Let’s take a walk down logic lane for a moment. The party line parroted by our civil servants is that the government’s Federal Direct Lending Program (FDLP) is cheaper or better or costs less than the private Federal Family Education Loan Program (FFELP). But here’s the real picture:

FDLP
Savings of .25% on interest rate
Fees paid by YOU (borrower)
$16 billion deficit

FFELP
Savings of up to 2.25% on interest rate
Fees covered by lender
Profitable since its inception

In this over simplified comparison, the FDLP is more expensive, costing taxpayers $16 billion dollars so far, while the FFELP hasn’t cost taxpayers a dime. The FFELP knocks 2.25% off your interest rate and pays origination and other fees, while the FDLP will take only .25% off your rate and passes the fees on to you.

If the Student Loan Legislation passes, borrowers lose. It’s that simple.

After students receive their financial aid award letter from their chosen university and figure out how much they need to fund in loans, college financial aid offices usually give students a list of “preferred lenders” or private lending companies they prefer to do business with. However, students are NOT REQUIRED to work with the companies mentioned on the list and have the right to “shop” for the best deal when it comes to funding their Federal Family Education Loans, including both the subsidized and unsubsidized Stafford and PLUS loans.

It is the right of the borrower to choose their own lender in accordance with the Higher Education Act. That Act mandates that colleges can not require students to get loans through the preferred lenders suggested by their college’s financial aid office. However, if the College Relief Act of 2007 becomes law student’s choice will be debilitated because colleges will be set to gain financially if they opt to go with the government’s Direct Lending program. Students will no longer be able to look for the best deals from the best private lenders.

Take a look at these facts:
FACT:
80% of America’s colleges and universities chose to work with FFELP because it delivers better service and more choices to their students than the Direct Loan Program.

FACT:
The Direct Lending Program COSTS TAXPAYERS - over $16 billion.

FACT:
Lending Companies give students interest rate reductions -the Direct Loan Program DOES NOT.

FACT:
The Direct Lending Program has ADDED to NATIONAL DEBT - it’s borrowed $105 billion, but has only $89 billion to repay the money.

FACT:
H.R. 5 DOES NOT provide relief to students. Interest rates are for subsidized college loans ONLY.

FACT:
This plan DOES NOT help students go to college, NOT ONE additional student will be able to attend college because of this act.

WE ARE OPPOSED TO THE COLLEGE STUDENT RELIEF ACT AND RELATED BILLS. MIDDLE CLASS FAMILIES SHOULD BE TOO! The government is taking money out of YOUR POCKET, AGAIN.

STOP the College Student Relief Act and related bills NOW!

This legislation STEALS THOUSANDS FROM STUDENTS by imposing a STUDENT LOAN TAX on all federally funded loans including Stafford, PLUS and Consolidation Loans.

We are opposed to this bill because it hurts the people it says it protects… the students!

Save student loan benefits and STOP the STUDENT LOAN TAX.

Call and E-mail Your Senator and Sign Our Petition.

FACT:
This bill is a political gimmick! Nothing more than a “good sound-bite.” It DOES NOT deliver on the promise to save students money.

FACT:
On January 2, 2012, the interest rate returns back to 6.8 percent, making the promised $4,400 in savings is IMPOSSIBLE TO ACHIEVE.

FACT:
80% of America’s colleges and universities chose to work with FFELP because it delivers better service and more choices to their students than the Direct Loan Program.

FACT:
The Direct Lending Program COSTS TAXPAYERS - over $16 billion.

FACT:
Lending Companies give students interest rate reductions -the Direct Loan Program DOES NOT.

FACT:
The Direct Lending Program has ADDED to NATIONAL DEBT - it’s borrowed $105 billion, but has only $89 billion to repay the money.

FACT:
H.R. 5 DOES NOT provide relief to students. Interest rates are for subsidized college loans ONLY.

FACT:
This plan DOES NOT help students go to college, NOT ONE additional student will be able to attend college because of this act.

FACT:
There in NO GUARANTEE that subsidies that HR 5 proposes to stop paying FEELP Loan providers will go back to support scholarships and education.

WE ARE OPPOSED TO THE COLLEGE STUDENT RELIEF ACT AND RELATED BILLS. MIDDLE CLASS FAMILIES SHOULD BE TOO!
The government is taking money out of YOUR POCKET, AGAIN.

Call and E-mail Your Senator and Sign Our Petition.

They Say:
U.S. Rep. George Miller, D-CA, of the House Committee on Education & Labor, as saying, “Once fully phased in, these cuts would save the typical borrower, with $13,800 in need-based federal student loan debt, $4,420 in savings over the life of the loan- relying on an analysis by U.S. PIRG. The new interest rate will drop to 3.4 percent by 2001, but on January 1, 2012 the rates will go back to 6.8 percent.

We Say:
U.S. PIRG, a public interest advocacy group, has said Miller’s office has misquoted its findings. Miller’s prediction assumes that the interest rate at its low of 3.4 percent will be permanent, although the act is scheduled to expire in 2012. A student with $13,800 in debt might save $4,420, but only if the rate was not scheduled to go back up to 6.8 percent in 2012.

They Say:
The STAR Act will help low-income students.

We Say:
The total average cumulative debt is roughly $13,800, thus saving the borrower approximately $4,400 at 3.4 percent with a 15-year repayment term. However, the 3.4 percent interest rate is limited to a six-month period, so it is unreasonable to assume that all of the subsidized Stafford loan debt will be at this rate.

They Say:
The STAR Act makes college more accessible or affordable for low-income students and benefits the taxpayer.

We Say:
The STAR Act does not make college more accessible or affordable for low-income students nor does it benefit the taxpayer: the U.S. government will lose billions in interest revenue because of the lower interest rate, which will cost taxpayers.

This act does nothing to make college affordable. It does nothing to reduce the $32 billion in unmet financial need that we identified from the 2004 NPSAS study.

WE ARE OPPOSED TO THE COLLEGE STUDENT RELIEF ACT AND RELATED BILLS. MIDDLE CLASS FAMILIES SHOULD BE TOO!

The government is taking money out of YOUR POCKET, AGAIN.

Call and E-mail Your Senator and Sign Our Petition.

The Financial Aid Process can sometimes seem like a maze of numbers, signatures and tax information, as just another cog in the already laborious bureaucracy of the Federal Government. However, Margaret Spellings, the U.S. Secretary of Education, has started a movement to simply the process, beginning with the Free Application for Federal Student Aid (FAFSA).

Bureaucracy Limits College Access
Apparently, the length and convolution of the form is one of the issues the Senate SHOULD be dealing with in order to help low-income students go to college. According to a report released by the Department of Education stated, “the complexity of the current financial aid form as being a barrier to college access, particularly among low-income students, who, the report states, tend to have greater difficulty compiling the necessary financial information. An estimated 1.5 million low-income students who were likely eligible for Pell Grants did not apply for aid in 2004, nearly double the number in 2000, according to the report.”

Move to Streamline the FAFSA
Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor, and Rep. Rahm Emanuel (D-Ill.), announced new legislation that would cut the form’s length from five pages to two, while increasing Web access, allowing high school juniors to file a “Pre-FAFSA” for planning purposes and encouraging coordination between the Internal Revenue Service and the Department of Education.

Ways to Streamline the Form
31 questions on the current federal financial aid form — or about two-thirds of those relating to income and assets — ask for information already provided to the federal government on tax forms. Students should be able to authorize the IRS to forward that data directly to the Education Department in order to streamline the Federal Financial Aid process.

WE ARE OPPOSED TO THE COLLEGE STUDENT RELIEF ACT
It creates even more bureaucracy for students to deal with by taking away their choice and making them deal only with the federal government to get their federal student loans. The government is looking to take money out of YOUR POCKET, AGAIN.

Call and E-mail Your Senator and Sign Our Petition.

STOP the College Student Relief Act and related bills NOW!

This legislation STEALS THOUSANDS FROM STUDENTS by imposing a STUDENT LOAN TAX on all federally funded loans including Stafford, PLUS and Consolidation Loans.

We are opposed to this bill because it hurts the people it says it protects… the students!

Save student loan benefits and STOP the STUDENT LOAN TAX.

Call and E-mail Your Senator and Sign Our Petition.

FACT:
This bill is a political gimmick! Nothing more than a “good sound-bite.” It DOES NOT deliver on the promise to save students money.

FACT:
On January 2, 2012, the interest rate returns back to 6.8 percent, making the promised $4,400 in savings is IMPOSSIBLE TO ACHIEVE.

FACT:
80% of America’s colleges and universities chose to work with FFELP because it delivers better service and more choices to their students than the Direct Loan Program.

FACT:
The Direct Lending Program COSTS TAXPAYERS - over $16 billion.

FACT:
Lending Companies give students interest rate reductions -the Direct Loan Program DOES NOT.

FACT:
The Direct Lending Program has ADDED to NATIONAL DEBT - it’s borrowed $105 billion, but has only $89 billion to repay the money.

FACT:
H.R. 5 DOES NOT provide relief to students. Interest rates are for subsidized college loans ONLY.

FACT:
This plan DOES NOT help students go to college, NOT ONE additional student will be able to attend college because of this act.

FACT:
There in NO GUARANTEE that subsidies that HR 5 proposes to stop paying FEELP Loan providers will go back to support scholarships and education.

WE ARE OPPOSED TO THE COLLEGE STUDENT RELIEF ACT AND RELATED BILLS. MIDDLE CLASS FAMILIES SHOULD BE TOO!
The government is taking money out of YOUR POCKET, AGAIN.

Call and E-mail Your Senator and Sign Our Petition.