Thank you for your support of our campaign to keep student loans local and preserve student choice!

As you may know, Congress announced on Monday, April 27, 2009 agreement on the President’s budget for 2010. We are pleased to see Congress included the following “Sense of Congress on College Affordability and Student Loan Reform” in the President’s budget proposal:

“It is the Sense of Congress that –

(1) nothing in the resolution should be construed to reduce any assistance that makes college more affordable and accessible for students, including but not limited to student aid programs and services provided by nonprofit State agencies and private lenders;

(2) private and non-profit lenders, originators, and loan servicers help students plan for, apply to, and pay for post-secondary education and training;

(3) any reform of the federal student loan programs to ensure that students have reliable and efficient access to federal loans should include some future role for the currently involved private and non-profit entities, including state non-profits with 100% FFEL lending in the State, and capitalize on the current infrastructure provided by private and non-profit entities, in order both to provide employment to many Americans during this time of economic distress and to maintain valuable services that make post-secondary education more accessible and attainable for many Americans; and

(4) therefore, pursuant to any changes to the student loan programs, loan processing, administration, and servicing should continue to be performed, as needed, by for-profit and non-profit entities.” – FY10 Concurrent Budget Resolution, sec. 605.

While specific details are not yet available, we are encouraged that our message was heard and many of the valuable benefits and services contained in the FFEL Program will continue. Our thanks to the thousands of individuals who have voiced their support for CSLF and other FFEL institutions nationwide.

Please continue making your voice heard in Washington. Communicate frequently with the Congress and the President. Thank them for their support and remind them of their promises to Connecticut’s schools, families, and students. Our task now is to work together to push for the broadest interpretation possible of the Sense of Congress.

SENATE:

http://www.senate.gov/general/contact_information/senators_cfm.cfm?State=CT

Web Form:  http://dodd.senate.gov/index.php?q=node/3130

Web Form:  http://lieberman.senate.gov/contact/

HOUSE:

http://courtney.house.gov/email/

Office Hours in Killingly:

Representatives from Congressman Courtney’s office also hold office hours at Quinebaug Valley Community College every 1st and 3rd Thursday from 12:00 PM – 5:00 PM.

http://delauro.house.gov/contact_form_email.cfm

http://forms.house.gov/larson/contact.html

https://forms.house.gov/chrismurphy/webforms/issue_subscribe.htm

http://himes.house.gov/?sectionid=54&sectiontree=54

White House & President Barrak Obama

http://www.whitehouse.gov/contact/

The Connecticut Student Loan Foundation is a non-profit corporation that administers, guarantees, and finances loans within the Federal Family Education Loan Program (FFELP). CSLF promotes access to higher education by helping students and their families plan for and pursue a postsecondary education. CSLF has more than 40 years of experience providing assistance to students, parents, and industry partners.

• For information about CSLF as a guaranty agency, visit the Guarantor Services section of our Web site

• For information about CSLF as a student loan lender, visit the Education Loan section of our Web site

• For information about CSLF college planning services, visit the College Planning section of our Web site

• CSLF Mission Statement

• CSLF Student Loan Business Practices

• CSLF 40 Year History

From the Frying Pan and Into the Fire?

~~~~~~~~~~~~~~~~~~~

Carolyn Karno, Manager of Early Awareness & College Planning at the Connecticut Student Loan Foundation, speaks on the problems with eliminating the Federal Family Education Loan program, as suggested under the Obama administration’s changes.

Carolyn discusses how the high-volume end-users, the schools, had the highest exposure to the deficits and limitations of the Direct Loan program, and how after some experimentation with DL, most schools switched back to FFELP. “That should tell you something, ” says Karno. She also addresses what President Obama suggests as the primary driver for the elimination of FFELP – cost savings to be put toward the expansion of the Pell Grant program. “It will come, most likely at the cost to the consumer.” Karno goes on to assert that this is “…not necessarily a win-win situation for students,” and that public school systems that have traditionally relied on the free services in college planning, financial aid training and early awareness will be at serious loss.

As Karno points out, individual students do not save any money by using the government’s Direct Loan program. In addition, when proponents of the Obama administration’s plan trumpet potential future savings, they forget to account for the fact that shifting all student loan business to Direct will also increase the national debt and government spending. Every dollar originated for student loans will either have to be borrowed by the Feds or will have to come from The Treasury. Thus, spending on loans for higher education will shift from the private market to consumers, increasing individual tax burden and possibly contributing to later inflation. For more information on preserving student choice, please go to http://www.keepstudentloanslocal.org.

Health Care’s Test Drive: Student Aid

By INVESTOR’S BUSINESS DAILY | Posted Tuesday, April 28, 2009 4:20 PM PT

College Loans:

President Obama says pushing private lenders out of the student-aid program would eliminate middlemen and save money. It’s a seductive argument. Expect to hear it on health care as well.

The president has a deal for you, the taxpayer: Take the current public-private student loan program and turn over the whole thing to the government. The result? Instant savings.

Gone would be the subsidies that, we’re told, now go straight into the pockets of private-sector lenders rather than to deserving students. The administration says it could save at least $48 billion over the next 10 years in this way.

As the president explained things last week, “We’re giving lenders billions of dollars in wasteful subsidies that could be used to make college affordable for all Americans.” It sounds so obvious that we have to wonder why anyone would have set up such a stupid system in the first place.

The answer is that the system is not nearly as stupid or wasteful as Obama makes it sound. And the lenders are not parasites. If the public can’t get this, then it is setting itself up for more radical change, starting with health care.

College is expensive and student loans are a burden for many reasons. But the most important, the inefficiencies of the colleges themselves, are not on the Obama radar screen.

That’s no surprise: Academia is a core constituency of the Democratic Party, so there will be no serious reform of that sector by a Democratic administration. Compared to the professoriate, bankers are easy targets. Taking away their subsidies will score political points for the Democrats. But the promised savings are much more doubtful.

The subsidies now cost taxpayers more than $5 billion a year, and the administration claims it can save most of that simply by cutting out the private lenders. In the process, though, it would take on a significant load of new debt.

Nonfederal lenders, including banks, nonprofits and state governments, account for about 80% of federally-sponsored student loans. The rest are direct loans from the feds. Obama’s plan would shift that 80%, roughly $60 billion a year, into direct lending.

The millions of new borrowers taken under the federal wing would create new ongoing costs as well as a new liability. The mere overhead of loan servicing would be significant; the administration knows it would have to contract with the private lenders to handle the customer service, collections and paperwork.

Student loans also have a relatively high default rate — running around 5% in recent years, though figures stop before the current recession. The subsidies to private lenders went to cover their loan losses. The federal government will face the same costs and will have to cover them with tax money.

But at least the lenders won’t get their old profits. That should save something, right? The answer depends on whether you believe (as did Adam Smith and countless economists since) that there’s a benefit in the division of labor.

Contrary to what Obama says, middlemen earn their keep. The government gives private lenders some profit because the lenders, through specialization, have become more efficient at their task than the government could ever be.

Then there is the benefit of choice. It’s worth something to the public that banks are competing for its business. Sooner or later, monopolies wear out their welcome.

Just about everything we’ve said here could apply to the role of the private insurers who stand in the way of a health care system funded solely by the government.

Obama would move the country toward such a single-payer model by setting up a tax-subsidized health plan to compete — on unequal terms — with the private players and eventually force them out of the health insurance business.

It would be the student loan takeover writ large, and the arguments would be similar: Private insurers’ profits are wasteful. Consumer choice is not worth the cost. Besides, the government plan will give you everything you want.

We hope to see a full debate over student loans, because the specious arguments for government monopoly need to be answered in ways that the public can understand. Otherwise, the country will soon have much more government and far less choice.

Found at:

http://www.ibdeditorials.com/IBDArticles.aspx?id=325810237924211

FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in an effort to advance understanding of political, economic, and higher education-related issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.

Proposed legislation threatens to set back the accomplishments of non-profit student loan lender/guarantors like the Connecticut Student Loan Foundation.

For over 40 years, CSLF has promoted access to higher education, helped families find financing for college, and assisted high school guidance professionals to shepherd first-generation and under-served populations into programs to help them discover and fulfill their dreams.

Current media coverage has tended to lump together large lenders and banks with smaller, non-profit companies like CSLF. All companies providing student loans have the potential to serve well and provide good products, but small-scale operations like the Connecticut Student Loan Foundation have always realized the real dividends are service, satisfaction and connection.

So here we are — and this is who we are: mothers, wives, husbands, musicians, mechanics, writers, cyclists, fathers, activists, bakers, readers and crafters.

We live in your town, we’re standing in the same long line at the DMV, our kids sit next to each other in school and we all want the same thing: people who really care about our shared future. That’s the person who answers the phone when you call CSLF.

Help save the Federal Family Education Loan program: click here for more information and learn how you can lend your voice to the fight for student choice and a solution that can work for us all.

http://www.cslf.com

“I am CSLF and I’m here to help you.”

Also see  http://www.keepstudentloanslocal.org

SAVE FFELP – CONTACT THE CONFEREES!

Last week, grassroots activists organized to voice their objection to the proposed elimination of the Federal Family Education Loan program, or FFELP, calling and emailing their representatives in Congress to stress the value of a competitive, service-oriented student loan program. Virtual Hill Day saw the congressional switchboard light up as staffers took calls from constituents asserting that students and families should have their choice of loan providers and should also continue to receive the outreach and other personalized services provided by organizations like the Connecticut Student Loan Foundation.

From all accounts, this week will resemble the past month or so with much continued debate in Congress regarding student loans — including the start and perhaps completion of deliberations and passage of the 2010 budget.  There has been increased activity to have this completed by sometime Wednesday — the 100th day of the Obama administration.

Senator Kent Conrad (D-ND) has been a vocal critic of a Budget Reconciliation process that goes beyond the designed purpose of reducing the deficit to address public policy that should be considered as part of “regular order” — through the regular deliberative process.  There is clear support for the views expressed by students, families and schools in North Dakota as well as throughout the nation.

The number of contacts last week in support of the Federal Family Education Loan Program (FFELP) was impressive (conservative estimates say as many as 8,000 calls were made!) and much more is needed the early part of this week.   There are a number of members of Congress, Governors, State boards of higher education, State Treasurers, and hundreds of financial aid professionals that have weighed in to support a program that has served them well since 1965.

There is a clear understanding that the status quo is not acceptable and that expanding the mandatory portion of the Pell Grant program is vital to the future of higher education. The proposals submitted by the College Board, NASFAA, Sallie Mae and others need to be considered.  A series of other proposals are expected this week.  There is no reason that the Congress can not establish a near-term deadline to consider higher education costs and financing.

The Senate passed Senator Lamar Alexander’s motion which instructs the Senate conferees to insist that the final conference report include the Senate position maintaining a competitive student loan program that provides students and institutions of higher education with a comprehensive choice of loan products and services, as contained in section 203 of S. Con. Res. 13, as passed by the Senate.  Both the House and Senate conferees were announced this week, and we have listed their information below for you.

CSLF’s role expands far beyond the guaranty and delivery of student loans.  While we remain focused and dedicated to our traditional responsibility of insuring federal student loans, our core functions have expanded to include:  promoting college access for all students, preventing student loan defaults for all borrowers,  providing training and support services to industry partners, distributing loan information and application materials to educate borrowers, supporting community outreach activities, and much more.

Just to offer one example of how FFEL agencies like the Connecticut Student Loan Foundation assist families locally, in an effort to ensure that families were able to complete the Free Application for Federal Student Aid (FAFSA) prior to the state deadline of February 15^th, staff dedicated the week of February 9^th as its “Last Chance FAFSA Blitz.”  While many consultants charge hefty fees for one-on-one assistance, CSLF continues to offer this vital service absolutely free of charge.   More than eighty families visited the company’s resource center and received free one-on-one assistance with their financial aid forms. In addition, our Investing in Futures hotline has handled more than 200 calls, with staff assisting families with the financial aid questions.  This blog and our associated web presences, posts and podcasts have helped families numbering in the thousands — all for free.

It’s clear that there is an incredibly valuable role for companies like the Connecticut Student Loan Foundation. For over 40 years, we’ve made service and assistance our mission. Our reach into under-served populations, potential first-generation college attendees and the schools without resources to promote higher education effectively without us, translates to dreams fulfilled, burdens lifted and potentials reached.  HELP US TO KEEP DOING WHAT WE DO.

Please take the time to contact each member and share your story or your observations about the crucial role that the Federal Family Education Loan Program plays!

Tell the conferees that ELIMINATING FFEL MEANS ELIMINATING CHOICE AND SERVICES!

House Members:

John M. Spratt, Jr. Ph: 202-225-5501  ashli.scott@mail.house.gov

Allen Boyd Ph: 202-225-5235  kara.stencel@mail.house.gov

Rosa DeLauro Ph: 202-225-3661  meghan.whealan@mail.house.gov

Paul Ryan Ph: 202-225-3031  joyce.meyer@mail.house.gov

Jeb Hensarling Ph: 202-225-3484  kyle.jackson@mail.house.gov

Senate Members:

Kent Conrad Ph: 202-224-2043  caitlin_coghlan@conrad.senate.gov

Patty Murray Ph: 202-224-2621 paula_burg@murray.senate.gov

Judd Gregg Ph: 202-224-3324 allison_dembeck@gregg.senate.gov