Results tagged “SAFRA” from EdLabor Journal

Today's Washington Post highlights a new study by the College Board on college pricing and student aid. It notes that:

Colleges and universities have not slashed sticker prices in response to the economic downturn. On the contrary, tuition and fees rose 6.5 percent at public four-year colleges compared with the 2008-2009 school year and 4.4 percent at private, nonprofit, four-year institutions. Those were steeper rates of increase than in prior years, after adjusting for inflation. Over the past decade, annual increases have averaged 4.9 percent at public colleges and 2.6 percent at private colleges.

It is clear that students and families are increasingly relying on Pell Grant scholarships and other forms of federal student aid to help pay for college. While college tuition prices continued to increase at rates consistent with years past, students had greater access to reliable low-cost federal loans and grant aid. The report also shows that private student loan borrowing decreased by 50 percent from one year earlier, in part due to the freezing of the credit markets.

As Chairman Miller said, “Although paying for college remains far too expensive a burden for families, especially in this economy, this report shows that our work to help make college more affordable is paying off.”

The House recently passed legislation that would make a landmark $40 billion investment to boost the Pell Grant over the next 10 years, to stabilize access to low-cost federal student loans, to strengthen Perkins loans, and do much more to make college more accessible at no cost to taxpayers. This report confirms that these types of investments, coupled with our ongoing efforts to reduce students’ dependence on costlier private loans, are needed to provide relief to families in a difficult economy.

Joining the growing chorus of newspapers in support of the Student Aid and Fiscal Responsibility Act, the Star-Tribune of Minneapolis-St. Paul wrote this morning that it is time to streamline student lending.

They said:

The historic legislation, championed by President Obama and approved by the U.S. House earlier this month, is a rare and welcome chance for Congress to actually streamline government instead of just talking about it. If approved by the Senate, the Student Loan and Fiscal Responsibility Act could save taxpayers $47 billion to $87 billion over the next 10 years by eliminating the middleman role private lenders play in federal education loans.

Families who now get their Stafford or parental PLUS loans through banks or credit unions or nonprofits such as Sallie Mae would instead borrow directly from the federal government, working through school financial aid offices just as they do now.

The Star-Tribune is another important voice in support of the Student Aid and Fiscal Responsibility Act. Be sure to read other editorials and articles that explain the benefits to students and taxpayers through federal student loan reform.

On Sunday the Houston Chronicle ran an editorial applauding the passage of the Student Aid and Fiscal Responsibility Act through the House of Representatives.

The editorial started:

It was a blessed relief last week, in the thick of such intractable issues as health care and Afghanistan, to see the House of Representatives pass a piece of legislation that was urgently needed, made perfect sense and — mirabile dictu — could save taxpayers billions of dollars.

Members approved a bill that would end subsidies to private lenders who currently finance college loans, putting the government directly in charge. This significant measure, a longtime goal of Democrats, would save taxpayers about $87 billion over the next decade, estimates the Congressional Budget Office.

Those savings would be used to boost student grants, improve early education and pre-school programs, support community colleges and modernize public schools.

The Houston Chronicle points out that this is something needed by students because enrollment in both four-year and community colleges is expanding. 

Democrats had been working for years to pass legislation curbing subsidies to lenders. Now, with a Democrat-controlled House, and with banks pretty much in the doghouse, the measure passed the House roughly along party lines, 253–171, with only four Democrats voting against and six Republicans in favor.

It is yet to be seen how the bill will fare in the Senate, but for now, it spells good news for students and taxpayers — especially in Texas, where, as reported by the Chronicle's Jeannie Kever, post-high school students have enrolled in record numbers for the current school year, in spite of concerns that the recession would dissuade many of them from entering college.

Community colleges told Kever that enrollment had “skyrocketed,” and preliminary data from four-year colleges show enrollment has increased in many of them too, assuaging fears that more students might opt for the cheaper community colleges.

We suggest you learn more about the Student Aid and Fiscal Responsibility Act and read the entire editorial.

Student Lending Analytics Blog asks the question, "What Do Students Think About Student Loan Reform?" and does a quick overview of editorial pages of college newspapers from coast to coast. Here is what they found:

• The Maine Campus (University of Maine):  "We applaud the representatives who passed what amounts to the largest higher education aid reform bill of our lives. We hope the Senate follows suit."
• The Daily Cardinal (Stanford University):  "The bill will help students graduate with less debt while saving taxpayers money. Such action is wise and long overdue."
• The Lariat online (Baylor University):   "Though the opposition may see this as just another area overtaken by the federal government that may lead to job loss through the industry or a burden on universities during the transition out of their respective federal lending programs, it is a risk and a burden well worth shouldering."
• Daily Pennsylvanian (University of Pennsylvania):  "Private lenders have shown that they are more trouble than they are worth, and redirecting the savings into expanding grants to students is an excellent, efficient redistribution of resources. We hope the House passes this bill."
• Georgetown Voice (Georgetown University):  "It is essential that the Senate passes this bill. As Hoyas who claim to strive for a diverse community, we must lend our support to initiatives like this, which are crucial to enabling people from every background to come here."
• The Daily Reveille (LSU):  "It’s finally time for banks to get their hands out of private education...Banks should not be in the business of profiting off the loans of students seeking the critical skills needed to compete in a global economy.  Higher education deserves better. Our nation’s undergraduates deserve every chance to succeed in America, and thus to make America succeed with them."
• Indiana Daily Student (University of Indiana):  "This bill decreases government bureaucracy, increases efficiency, wastes fewer taxpayer dollars and stops payouts to financial institutions for doing absolutely nothing but shifting their losses onto taxpayers. What’s not to love?"

Most telling is what happened when they went searching for collegiate opponents.

It is somewhat curious that if you Google  "students who support FFELP" you will get the following message:  No results found for "students who support FFELP".

Learn why college and university papers from coast to coast support the Student Aid and Fiscal Responsibility Act.

Ruth Marcus has a column in today's Washington Post about President Obama's quiet success on schools. She writes:

Cutting out this "unwarranted subsidy," as Obama put it in a speech Monday, would free up almost $90 billion over 10 years. The House would use the largest chunk of that money to raise Pell Grant amounts for low-income college students; the grant amounts have lagged far behind increases in tuition costs.

The money is also directed in other, innovative ways. About $10 billion would go to community colleges -- the biggest infusion of federal cash ever to these institutions.

Colleges would get $2.5 billion to figure out how to keep track of how many students manage to graduate, as opposed to piling up debt and then dropping out. In the House, private colleges were able to wiggle out of this requirement; the Senate ought to hold them to it.

Another $8 billion would go to early childhood education programs, which vary widely in quality, with the goal of establishing some standards and accountability for preschool programs.

Meanwhile, the administration has seized on education funding in the stimulus bill to push its reform agenda. The stimulus included $4.35 billion for competitive grants to states to improve elementary and secondary education -- the largest-ever amount of discretionary federal funding for school reform. The administration's proposed regulations on these Race to the Top funds require that any state wishing to compete for the money must lift restrictions on the number of charter schools and get rid of laws or rules that prohibit linking teacher pay to student performance.

Seven states -- Tennessee, Rhode Island, Indiana, Connecticut, Massachusetts, Colorado and Illinois -- have revoked their limits on charter schools. The California legislature set aside a 2006 law that prohibited using student performance data to evaluate teachers.

Finally, the appropriations bills moving through Congress would further the reform push. Most important, they would dramatically boost funding -- from $97 million in 2009 to as much as $446 million in 2010 -- to offer higher pay to teachers and principals who improve performance in high-poverty schools.

The Education and Labor Committee has been a strong partner with the White House in passing the Student Aid and Fiscal Responsibility Act as well as ensuring funding for the Race to the Top.

E.J. Dionne's commentary in the Washington Post today, A Political Idea Warp, makes the point that sometimes political labels are less than helpful in evaluating various proposals before Congress. He uses the Student Aid and Fiscal Responsibility Act as an example.

The bill, which passed 253 to 171, would allocate about $80 billion over the next decade for new loans, community colleges, school construction and early childhood programs without increasing taxes or adding to the deficit. How? Instead of paying bankers to provide loans for which they bear no real risk, the government would make the loans directly.

Liberals are always accused of spending money without worrying where it comes from, but in this case, costs are covered by making a government program more efficient -- yes, at the expense of bankers.

"We were paying these exorbitant subsidies to bankers who were taking government money, loaning it to somebody else, getting government guarantees that the loans would be paid back, and then taking all these profits," said Rep. George Miller (D-Calif.), the bill's champion. This, he told me, led Congress to ask itself: "Hey, chump, what is it you don't get about what's going on here?" The only knock on the proposal is ideological: that government is "taking over" the student loan program. But it's already a government program. The bill simply eliminates corporate welfare.

This is a classic case of how the Great Ideological Distortion Machine does its mischief: Instead of focusing on how the bill advances values typically regarded as "centrist" -- government efficiency, pay-as-you-go budgeting -- the banks' defenders bury the specifics behind abstract discussions of "big government." Yet I'd venture that middle-of-the-road Americans prefer that their tax money go toward education rather than to padding the profits of financial firms.

Mr. Dionne also remarks about how this talk over labels and "prefabricated boxes" is coloring the health care debate. We encourage you to read the entire article.

This afternoon, the House passed the Student Aid and Fiscal Responsibility Act (HR 3221) by a vote of 253-171. The bill ensures that higher education is more affordable at no additional expense to taxpayers – in fact, it saves money. More students will go to college, they will graduate with less debt, and the federal loan initiatives that they and their families depend upon will be strengthened for decades to come. The legislation will generate almost $100 billion in savings over the next 10 years that will be used to increase Pell Grant scholarships, keep interest rates on federal loans affordable, and safeguard federal student loan access for families.

Speaker Pelosi:

Education and Labor Committee Chairman George Miller (D-CA):

Chairman Miller: “My colleague on the other side of the aisle said that this legislation is the wrong way and the wrong place to make this investment. He’s got it exactly backwards. This is the exact way to make this investment. To take the savings by cutting the subsidies to the lenders and recycling those on behalf of families and students and our community institutions so that we can expand the educational opportunities in this country. we cannot continue just to wring our hands about our competitive place in the world..we must do something about it.”

Rep. Ruben Hinojosa (D-TX):

Hinojosa: “The legislation will increase affordability, accessibility and college completion rates particularly for first generation college low-income, minority and middle-class students. It invests $40 billion to increase the maximum annual Pell Grant scholarships to $5,550 by 2010 and 2019, $6,900 and provides low and middle income families with affordable, direct federal student loans and simplifies the application process for financial aid.”

Rep. Rob Andrews (D-NJ):

Andrews: “The issues before the House tonight are these. Do you agree or disagree that the time has come to make college more affordable for men and women around this country by making Pell Grant scholarships more available, student loans less expensive and more available? I think most people would say, yes, we do agree with that.”

Rep. Judy Chu (D-CA) on the investments the Student Aid and Fiscal Responsibility Act makes to community colleges:

Chu: “As a Professor for over 20 years, I know firsthand how important community colleges are to helping hard working Americans achieve their dreams. About one out of every two college students attends a community college and they are some of the hardest workers I have ever met. My students came from all walks of life - they were immigrants, single moms and laid-off workers and many of the students were the first in their families to go to college. Community colleges are the backbone of our nation’s workforce.”

Chairman Miller responds to criticism of the bill and Rep. Tim Bishop (D-NY) explains how this legislation reforms student loan practices for the benefit of both the taxpayer and the borrower:

Bishop: “What we are doing is we are paying private lenders a subsidy so that they will have the privilege of lending federally originated money to their borrowers. We guarantee repayment of that money to the tune of 97% of the amount outstanding and the private lenders reap whatever interest payments are paid by the borrowers. This is a really, really good deal for private lenders. It is a deal that costs the American taxpayer approximately $8 billion to $9 billion a year that we don’t need to spend in that fashion. We can provide, We, the federal government, can provide the loan capital that students need.”

Chairman Miller appeared on Bloomberg TV to talk about House passage of the Student Aid and Fiscal Responsibility Act by a bipartisan vote of 253 to 171. He highlighted how the bill:

• Invests the bill’s savings in making college affordable and helping more Americans graduate
• Provides reliable, affordable, high-quality Federal student loans for all families
• Prepares students and workers for 21st century jobs by providing all Americans with the skills and resources they need to compete
• Promotes early learning standards reform to ensure the next generation of children enter kindergarten with the skills they need to succeed in school
  
• Meets Pay-As-You-Go fiscally responsible principles and reduces the deficit  

Today Gail Collins in the New York Times writes an editorial about how the Student Aid and Fiscal Responsibility Act makes sense and is needed for today's American students:

Let us stop here and recall how the current loan system works:

1) Federal government provides private banks with capital.

2) Federal government pays private banks a subsidy to lend that capital to students.

3) Federal government guarantees said loans so the banks don’t have any risk.

And now, the proposed reform:

1) The federal government makes the loans.

....

If it all works out, Congress will have come a way toward fixing this problem, at least when it comes to federally financed student loans. There’s already a new law that forgives part or all of the debt for graduates who go into careers in public service. Terms will be easier for low-income debtors.

The House will vote on the Student Aid and Fiscal Responsibility Act today. Stay tuned to our Twitter feed for updates on the debate and the vote.

Both the New York Times and the Washington Post editorial boards called for Congress to pass the Student Aid and Fiscal Responsibility Act, H.R. 3221, this morning.

The New York Times said:

Congress has a chance, starting this week, to end the boondoggle that allows private lenders to earn a handsome subsidy for making risk-free student loans that are guaranteed by the federal government. It’s a wonderful deal for the lenders — and an emphatically bad one for the taxpayers.

The House is expected to vote on Thursday on a bill that would simplify the loan system — and save the country nearly $90 billion over the next decade — by ending the subsidy program and allowing students to borrow directly from the government through their colleges and universities. To get this done, however, lawmakers will need to see through the spin and misrepresentations that have become all too common lately.

...

Lawmakers need to put aside all the noise and pass this bill.

The Washington Post said:

EXCEPT FOR a lucky few, paying for college isn't easy. Judging from how long it has taken, neither is reforming how the government provides the loans that make higher education affordable to millions. Yet Wednesday, as the House considers a bill that promises to save taxpayers billions of dollars, it's clear that the right choice is to vote yes.

Historically, the government has kept student-loan interest rates low through two programs: one in which the feds do the lending directly; and one in which the government subsidizes private entities that offer students loans at low, set interest rates. For more than a decade, private lenders fought back attempts to end the expensive subsidy system that kept them profitable at taxpayer expense. Then came the financial crisis, during which the public-private system fell apart, and the election of President Obama, who is intent on getting rid of the private middlemen.

According to the Congressional Budget Office (CBO), if the government directly financed all federally sponsored student loans, it would save $80 billion over 10 years. House Democrats have advanced a version of the president's plan that will probably get a vote in the House Thursday; the measure would put those savings into a range of worthy programs, from aid for community colleges to school renovation to larger Pell grants.

The Student Aid and Fiscal Responsibility Act will be considered on the House floor today and tomorrow. Stay tuned for updates.

Tuesday was a jammed packed day for George Miller on health reform and college affordability. Starting at 9 am, he co-chaired a forum on health insurance reform, attended a Democratic Caucus on health care with President Obama’s senior advisor, held a rally with college students and Secretary of Education Arne Duncan on the Student Aid and Fiscal Responsibility Act (HR 3221), took calls with reporters and editorial boards across the country, and appeared before the House Rules Committee to get the bill on the House Floor.  The bill will be debated Wednesday and voted on Thursday.  It was a very good day for the interests of American consumers and families.

Below is a slideshow of his very busy day of action:

The Lincoln (NE) Journal Star wrote an editorial last week about the importance of investing in early learning.

Pay heed to local hard-headed law enforcement professionals who deal with the worst that society has to offer on a daily basis.

Speaking out in support of increased funding for early childhood education this week were Lincoln Police Chief Tom Casady, Lancaster County Attorney Gary Lacey and his chief deputy Joe Kelly.

"It's a concept that makes complete sense to all of us in this line of work," Kelly said. "The mission is validated by research."

Studies show a return of as much as $13 for every dollar invested in care and learning systems for disadvantaged children, according to Jen Hernandez of the Nebraska Children and Families Foundation.

The return comes in the form of savings in the cost of operating the criminal justice system, welfare, schools and other public systems. Research shows that participants in early childhood programs are as much as 29 percent more likely to graduate from high school and 40 percent less likely to repeat grades or be placed in special education.

The Student Aid and Fiscal Responsibility Act will invest $1 billion each year in competitive grants to challenge states to build comprehensive, high quality early learning systems for children birth to age 5. It will also:

• Build an effective, qualified, and well-compensated early childhood workforce by supporting more effective providers with degrees in early education and better compensation, and providing sustained, intensive, classroom-focused professional development to improve the knowledge and skills of early childhood providers
• Best practices in the classroom by implementing research-based early learning and development standards aligned with academic content standards for grades K-3.
• Promote parent and family involvement by developing outreach strategies to parents that will help them support their children’s development.
• Fund quality initiatives that improve instructional practices, programmatic practices, and classroom environments that promote school readiness.
• Quality standards reform that moves toward pre-service training requirements for early learning providers, and adoption of developmentally appropriate standards for teacher-child ratios and group size.

The Student Aid and Fiscal Responsibility Act will be on the House floor for debate and a vote this week. Learn more about it.

CNN highlights a report (PDF) by The Project on Student Debt that found "an increasing number of college students are turning to private loans -- one of the riskiest ways to pay for schooling." Additionally, "of those who borrowed privately, [they] did not take full advantage of what it called safer and more affordable federal loans."

Private loans are often riskier because they have variable interest rates and cannot be discharged via bankruptcy. Nor are they eligible for payment deferments, loan forgiveness programs or income-based repayment options, like those that began on July 1, 2009.

Americans need affordable, quality education opportunities to help make our economy strong and competitive again. President Obama has identified an opportunity to make historic investments in our economic future by improving early education opportunities and making college dramatically more affordable – and all at no cost to taxpayers.

The Student Aid and Fiscal Responsibility Act would do just that:

• Invests $40 billion to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $6,900 by 2019. Starting in 2011, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index plus 1 percent.
• Strengthens the Perkins Loan program, a campus-based program that provides low-cost federal loans to students, by providing the program with more reliable forms of credit from the federal government and expanding the program to include significantly more college campuses.
• Keeps interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012.
• Converts all new federal student lending to the stable, effective and cost-efficient Direct Loan program. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy.
• Provides all federal student loan borrowers with upgraded, modern, state-of-the-art customer service. Rather than force private industry out of the system, the bill will forge a new public-private partnership that provides all borrowers with the highest-quality customer service when repaying their loans and maintains jobs. It will establish a competitive bidding process that allows the U.S. Department of Education to select lenders based on how well they serve borrowers, educate them financially, and prevent loan defaults. It will provide a role for non-profits to continue servicing student loans.

We encourage you to learn more about the Student Aid and Fiscal Responsibility Act, read CNN's article and The Project on Student Debt's report (PDF).

CQ Politics ran John Cranford's column yesterday explaining the logic behind the Student Aid and Fiscal Responsibility Act.

Two weeks ago, the House Education and Labor Committee, with the strong encouragement of the Obama administration, took a step toward ending the false premise that private lenders are full partners in the federally subsidized college loan program. If a bill approved by the committee becomes law, private lenders will be cut out of this program and will have to stop dining at their taxpayer-provided trough.
....
The lenders have held up the pretense that they provide better service than does an arm of the federal government and that there are actually differences among bank loans, so that students stand to benefit by picking one over the other.

Sorry, but that notion is a sham. Congress has long required that the terms of these loans be identical, regardless of whether they are issued by the government or a private lender. It doesn’t matter to the student where the money comes from — the dollar amounts, the interest rates and even the repayment terms are virtually the same.

For taxpayers, though, there is a difference, and it’s a big one. In the case of presumed “private” loans, the government pays more than it does for “direct” loans — billions of dollars more — because it guarantees the principal amount and it promises a minimal return to the lender. Banks are supposed to be compensated for taking risks, but in the case of government-subsidized student loans, they incur almost no risk. Yet they get compensated anyway.

Moreover, there’s ample evidence that some private lenders have engaged in questionable or worse behavior to persuade colleges to funnel student borrowers their way. When money is free, people will do all sorts of things to get their hands on it. And that raises questions about why lawmakers would want to perpetuate a system that promotes graft, as well as waste.

Learn more about the benefits of the Student Aid and Fiscal Responsibility Act and read Mr. Cranford's complete column.

Stephen Burd at The Higher Ed Watch Blog has a very thorough post about some of the scare tactics from opponents of the Student Aid and Fiscal Responsibility Act.Opponents have said that despite the $40 billion dollar increase to Pell Grants, it is a "setback for students" because it removes "the ability for borrowers to choose a lender."

As Mr. Burd so elegantly points out:

If there is anything that we learned from the "pay for play" student loan scandal, it is how little choice borrowers in the FFEL program actually have. Don't forget that in 2007, the Education Department found that one lender made at least 80 percent of students' federal loans at 921 participating colleges. That same year, the research firm Student Marketmeasure reported that 1,412 FFEL schools had one loan provider that made 80 percent of their students' federal loans, with 531 of those colleges recommending only a single lender to their students. What kind of a choice is that?

and as Rep. Tim Bishop (D-NY), a former Provost of Southampton College where he worked for 29 years, said at the markup of the Student Aid and Fiscal Responsibility Act, "I never once encountered a student who was focused on choice. What they were focused on was 'Can I get the money?' and 'Can you guarantee me that I can get the money?'"

We encourage you to read Mr. Burd's complete post as well as learn more about the Student Aid and Fiscal Responsibility Act.

Support for the Student Aid and Fiscal Responsibility Act

• President Obama's statement »


• 21st Century School Fund »
  (PDF, 63kb)
• AFL-CIO »
  (PDF, 46kb)
  
• AEC Science & Technology »
  (PDF, 121kb)
• American Association of Community Colleges »
  (PDF 74kb)
• American Association of School Administrators »
  (PDF, 45kb)
• American Association of State Colleges and Universities »
  (PDF, 37kb)
• American Association of University Women »
  (PDF, 63kb)
• American Council on Education »
  (PDF 37kb)
• American Federation of Teachers »
  (PDF 77kb)
• American Indian Higher Education Consortium »
  (PDF, 37kb)
• American Institute of Architects »
  (PDF, 63kb)
• Association for Career and Technical Education »
  (PDF, 49kb)
• Association of American Universities »
  (PDF, 37kb)
• Association of Community College Trustees »
  (PDF 74kb)
• Association of Educational Service Agencies »
  (PDF, 63kb)
  
• Association of Jesuit Colleges and Universities »
  (16 kb)
• Association of Public and Land-grant Universities »
  (PDF, 37kb)
• Business Roundtable »
  (PDF, 52kb)
• California Charter Schools Association »
  (PDF, 71kb)
• Californians for Schools Facilities »
  (PDF 328kb)
• Campaign for America's Future »
  (PDF, 46kb)
• Campaign for College Affordability »
  (PDF 46kb)
• Campus Progress»
  (PDF, 26KB)
• Campus Progress Action »
  (PDF 42kb)
• Center for Law and Social Policy »
  (PDF, 66kb)
• Child Welfare League of America
  (PDF 73kb)
• Children Now »
  (PDF 116kb)
• Children's Defense Fund »
  (PDF, 74kb)
• College Board »
  (PDF 378kb)
• Council for Opportunity in Education »
  (PDF 64kb)
• Council of Educational Facility Planners International »
  (PDF, 63kb)
  
• Council of the Great City Schools »
  (PDF 62kb)
• Demos »
  (PDF, 46kb)
• Early Care and Education Consortium »
  (PDF, 60kb)
• Easter Seals Disability Services »
  (PDF, 132kb)
• Ecobuild America »
  (PDF 121kb)
• Education Finance Council »
  (PDF 23kb)
• EDUCAUSE »
  (PDF, 37kb)
• Fight Crime: Invest in Kids »
  (PDF, 606kb)
• First Five Years Fund »
  (PDF, 589kb)
• First Focus »
  (PDF, 339kb)
• Hispanic Association of Colleges and Universities »
  (PDF, 37kb)
• International Union of Bricklayers and Allied Craftworkers »
  (PDF, 63kb)
• Knowledge Learning Corporation
  (PDF, 75kb)
• Mathematical Association of America »
  (PDF, 33kb)
• National Association for College Admission Counseling »
  (PDF 54kb)
• National Association for the Education of Young Children »
  (PDF, 42kb)
  
• National Association for Equal Opportunity in Higher Education »
  (PDF, 37kb)
• National Association of Child Care Resource & Referral Agencies »
  (PDF, 1.34mb)
• National Association of Elementary School Principals
  (PDF, 51kb)
• National Association of Federally Impacted Schools »
  (PDF, 47kb)
• National Association of Student Financial Aid Administrators »
  (PDF 121kb)
• National Black Child Development Institute »
  (PDF, 84kb)
• National Consumers League »
  (PDF, 46kb)
• National Direct Student Loan Coalition »
  (PDF 118kb)
• National Education Association »
  (PDF 62kb)
• National Fraternal Order of Police »
  (PDF 44kb)
• National Head Start Association »
  (PDF, 38kb)
• National PTA »
  (PDF, 63kb)
• National Rural Education Advocacy Coalition »
  (PDF, 63kb)
• National School Boards Association »
  (PDF 111kb)
• National Women's Law Center »
  (PDF, 34kb)
• Organizations Concerned About Rural Education »
  (PDF, 63kb)
• Pew's Pre-K Now »
  (PDF, 24kb)
• Rebuild America's Schools »
  (PDF, 63kb)
• Riverside Community College District »
  )PDF 126kb)
• Rock the Vote »
  (PDF, 46kb)
• State Higher Education Executive Officers »
  (PDF 67kb)
• The Institute for College Access & Success »
  (PDF, 30KB)
• UNCF »
  (PDF, 37kb)
• United States Green Building Council »
  (PDF, 72kb)
• United States Public Interest Research Group »
  (PDF 165kb)
• United States Student Association »
  (PDF, 970kb)
• US Action »
  (PDF, 46kb)
• Voices for America's Children »
  (PDF 73kb)
• The Workforce Alliance »
  (PDF 41kb)
• Zero to Three »
  (PDF 50kb)

This morning's Boston Globe editorial calls for ending taxpayer subsidy to banks who make no-risk federal student loans that are insured by the government. After going through the many new benefits under the Student Aid and Fiscal Responsibility Act of 2009, the Globe says this:

This taxpayer money is urgently needed to provide aid to students for whom a four-year college is out of reach. Earlier this week, Obama proposed to infuse $12 billion into community colleges. Another block of savings will give extra funding for Pell Grants and link them with cost-of-living increases.

In this economic climate, Congress must fix the broken system that unnecessarily takes money from taxpayers and students. Educational investments should go straight to students.

We encourage you to read the entire editorial, as well as learn more about the Student Aid and Fiscal Responsibility Act of 2009.

UPDATE: We also suggest you read the Washington Post article about Lifelines in the Student Loan Sea.

Read H.R. 3221, the Student Aid and Fiscal Responsibility Act, as passed by the House.(PDF490 KB)

Read the entire Student Aid and Fiscal Responsibility Act as introduced.(HR3221) (PDF 327 KB)

A Landmark Investment in America’s Economic Future

Americans need affordable, quality education opportunities to help make our economy strong and competitive again. President Obama has identified an opportunity to make historic investments in our economic future by improving early education opportunities and making college dramatically more affordable – and all at no cost to taxpayers.

The Student Aid and Fiscal Responsibility Act embraces the president’s challenge. It will help us reach his goal of producing the most college graduates by 2020 by making college accessible and transforming the way our student loan programs operate. It will expand quality early education opportunities that will put more children on the path to success. It will strengthen community colleges and training programs to help build a highly-skilled, innovative, 21st century workforce ready for the rigors of a global economy. And it will boost the fiscal health of the country our children will inherit by paying down the deficit. (What's in the bill for you?)
 

• Invests the bill’s savings in making college affordable and helping more Americans graduate
• Provides reliable, affordable, high-quality Federal student loans for all families
• Prepares students and workers for 21st century jobs by providing all Americans with the skills and resources they need to compete
• Promotes early learning standards reform to ensure the next generation of children enter kindergarten with the skills they need to succeed in school
  
• Meets Pay-As-You-Go fiscally responsible principles and reduces the deficit  

 

The financial crisis exposed serious vulnerabilities in the lender-based federally guaranteed student loan programs – putting the low-cost federal loans that millions of families count on in jeopardy. Now more than ever, students and families need access to reliable, stable forms of federal student aid to pay for college. The Student Aid and Fiscal Responsibility Act will make our federal student loan program more cost-effective and efficient for those they were intended to serve: students and families working hard to pay for college. Specifically, the legislation will:

Create a more reliable, affordable, student-focused federal loan program by switching to all Direct Loans by 2010

• Converts all new federal student lending to the stable, effective and cost-efficient Direct Loan program. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy.
• Provides students with low-cost federal college loans with the same interest rates, terms and conditions as loans made by lenders – and the peace of mind of knowing those loans will never disappear. Loans made through both the Direct Loan and the federally-guaranteed student loan programs carry an interest rate of 6.8 percent – a much more affordable interest rate than private loans carry. Under this legislation, federal student loan borrower will be able to borrow the same loans, at the same good rates as before – but these loans will be more cost-effective for taxpayers.  
  

Ensure that all student borrowers can benefit from high-quality, state-of-the-art customer service when repaying their loans

• Upgrades the services all federal student loan borrowers receive. Rather than force private industry out of the system, the bill will forge a new public-private partnership that both maintains jobs and provides all borrowers with the highest-quality customer service when repaying their loans. It will establish a competitive bidding process that allows the U.S. Department of Education to select lenders based on how well they serve borrowers, provide financial literacy counseling, and prevent loan defaults. The legislation will also provide a role for non-profits to continue servicing student loans.
• Preserves servicing jobs in communities across the country. Between this new public-private partnership and the more than $500 billion in outstanding federally-guaranteed student loans that will still need to be serviced, there will be tremendous demand for workers to continue providing great service to Americans repaying their loans.
  

Streamline financial aid operations for colleges and universities

• College financial aid offices already have the infrastructure in place to administer Direct Loans. Schools will be able to operate these loans using the same on-site system currently used to administer Pell Grant scholarships; almost all schools participate in the program. Colleges and universities that have switched to Direct Loans, including those that converted in the midst of last year’s credit crisis, report that it was a fairly easy and inexpensive process. Currently about 1,700 schools participate in the Direct Loan program, including 500 colleges that switched in the past year alone. Under this bill about 4,500 colleges will need to switch to Direct Loans.

A college degree continues to be the best pathway to the nation’s middle class. It’s also the best way to prepare our workers for the jobs of the future, to compete in a global marketplace, and to rebuild our economy so that it’s strong, innovative, and once again sets an example for the rest of the world. With more Americans than ever looking to go to college or return to school to get additional skills needed in new and emerging fields, community colleges have an increasingly important role to play in educating and training America’s workforce.

Just this week, President Obama set a new goal of graduating 5 million more Americans from community colleges by 2020. This legislation includes President Obama’s groundbreaking community college reforms that will help reach this goal and prepare students and workers for 21st century jobs by:

Creating a new Community College Challenge Grant Program that will transform community colleges into excellent education and job training centers

• Build a 21st century workforce by encouraging historic partnerships between community colleges, businesses, job training and adult education programs. The bill will create a new competitive grant program for community colleges to improved instruction, work with local employers, improve their student support services, and implement other innovative reforms that will lead to a college degree, certificate or industry-recognized credential to fulfill local workforce needs. The Secretary of Education will be able to evaluate the effectiveness of all programs and policies funded through these grants by using 2 percent of these funds to commission the Institute for Education Sciences to conduct a rigorous study to help the Secretary determine which reforms may be replicated at other colleges and states.
• Incentivize community colleges to achieve excellence by requiring them to meet benchmarks in order to participate in the challenge grant program. Under the program, the Secretaries of Education and Labor will award four-year grants to community colleges and other 2-year degree granting institutions on a competitive basis to support innovative pilot programs and policies. In order to continue to receive funding for year three of the grant period, community colleges must meet benchmarks they set in consultation with the Secretary of Education’s approval. Pilot programs and policies must also demonstrate that they can be replicated either in the state or nationwide. The minimum grant that can be awarded is $1 million. Funds can be used to carry at least two of the following activities:
  

1. Facilitating transfer of credit articulation agreements;
2. Expanding academic and training programs that provide relevant job-skill training for high-wage occupations in high-demand industries; 
3. Improving student support services including those identified under the Workforce Investment Act; 
4. Creating workforce programs that blend basic skills and occupational training leading to industry-recognized credentials; 
5. Building and enhancing linkages including dual enrollment programs and early college high schools as well as improving remedial and adult education programs; and
6. Implementing reform programs to increase completion rates and provision of training for students to enter high-wage occupations in high-demand industries.
   

• Ensure that more students graduate with the expertise needed for high wage jobs and high-demand industries. Targets grants to high-need students and programs that focus on preparing students for jobs in fields that need workers and will continue to grow. The Secretaries would also be able to award six-year competitive grants to states to implement successful Challenge Grant Program reforms at other community and junior colleges within the state. Funding could be discontinued if the state does not make progress meeting benchmarks it develops with the Secretary by year three of the grant period.

Expanding access to education by supporting free, high-quality, online training, and high-school and college courses.

• The U.S. Department of Education would be authorized to make competitive grants available to eligible colleges, workforce programs or other entities to help support the development of these courses.

Ensuring that Americans can learn in modern, updated, and state-of-the-art community college facilities.

• Helps community colleges construct, renovate and repair their facilities by providing $2.5 billion, which will leverage additional funds, and ensures that funding is used for facilities that are primarily used for instruction, research, or student housing.