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

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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.

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.

One of the most prevalent phenomenons we witness in financial aid and college planning is a general lack of understanding of how money, credit and debt work. Parents are ill-equipped to prepare their students to become borrowers because they themselves often have faced their own struggle with budgeting and credit.

Since April is Financial Literacy month, we wanted to invite our borrowers, financial aid professionals and guidance staff to make use of some tools for besting the money beast. Consumers who understand money and debt are their own best advocates and make better choices in their spending and repayment. Read on to take advantage of some great free resources!

The folks over at http://www.financialliteracymonth.com have put together a list of “A-list tips” from an assortment of great personal finance blogs and sites. Not only is there a list of great tips right there (http://www.financialliteracymonth.com/Tips-and-Gadgets/AListTips.aspx), but it is a fantastic way to connect to a wealth of other sources of great information!

Here are just three sites to get you started:

1. Free Money Finance

This free site aggregates post relating to everything “money” – here are just some of the categories:

http://www.freemoneyfinance.com/budgeting/index.html

2. Make Love Not Debt

Make Love Not Debt is a site that describes itself as a “relationship finance blog” and I have to say, I really love this idea.  Not only does this site cover a plethora of debt and money-related topics, but it does so in the context of being in a relationship, whether that’s your P.O.S.S.L.Q. (person of the same sex sharing the same living quarters), your spouse, or your whole family.  Great idea. Someone should teach “relationship finance” in high school along with home economics; I think the divorce rate would plummet.

Budgeting: Or How We Learned Not to Kill Each Other

3. My Dollar Plan

Whether you’re a college student new to budgeting or trying to get all your “dollar ducks” in a row, Financial Literacy month is a great time to commit to understanding and de-mystifying your personal finances.  The combination of “math and money” often intimidates both the college-bound and their parents, but with so many tools online to assist you, you can breathe a sigh of relief. You’re not alone in trying to figure it out and there’s a very supportive online community to help you get a leg up on your financial understanding and to keep you on top of things.

For students and their families, one of the most overwhelming parts of figuring out financial aid is figuring out the actual cost of attendance.  To get a realistic grip on how much you’ll spend that first year, factor in all the incidentals, not just tuition, room and board.

Students must consider the direct costs associated with a college education, such as tuition, fees, room, and board as well as the indirect costs of an education. These indirect costs can include books and supplies, living expenses (if living off-campus), telephone, transportation, clothing, entertainment, medical, and other necessary personal expenses. To calculate your direct and indirect college costs, use our online calculator and budget worksheet.

Now, don’t forget to go to http://financialliteracymonth.com and check out the rest of the tips. There’s even a place where you can print out a pledge to approach your finances consciously and responsibly –

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

Attention students, families, guidance and financial aid professionals!

Are you worried about the future of FFELP under President Obama’s new budget plan? Students, schools (high schools and colleges) have reason for concern.

The local and personalized services The Connecticut Student Loan Foundation provides to students, families, and schools are in danger with the plan to make federal student loans only available through the Direct Lending program.  With the elimination of FFELP, thousands of jobs around the country at organizations like ours will be lost. 

What can you do?  TAKE ACTION! If you would like to make your voice heard in the fight to save FFELP, participate in “Virtual Hill Day” on Wednesday April 22, 2009. Virtual Hill Day is an effort for FFELP users (students and parents) and supporters to have their voices heard by calling their representatives in Congress to tell them our concerns with this plan.

Be sure to call on April 22, 2009 between 9:00 am and 5:00 pm so our combined efforts will have the greatest impact!

Choose which talking points  you would like to emphasize.  We suggest including the loss of personal, local services to the community and the loss of jobs.

• I am calling from [Your town/city], Connecticut.

• I am calling to express my concern with the “reconciliation” provision for student loans included in the House budget resolution.

• If included in the House-Senate conference budget resolution, this provision would expedite legislation that eliminates the Federal Family Education Loan Program (FFELP) – the private-sector based student loan program – and mandates that all students and schools borrow through the Government-controlled Direct Loan program.

• Students should have choice and should continue to receive the outreach and other personalized services provided by organizations like the Connecticut Student Loan Foundation.

• Having the Department of Education as the single source of Federal student loans would deprive students of the specialized outreach services CSLF provides in Connecticut.  Direct Government financing of all student loans would also significantly increase national debt.

• Thank you for your time, and please DO NOT support a conference budget resolution that includes a reconciliation instruction for student loans, which could eliminate the vital role of organizations such as the Connecticut Student Loan Foundation.

If you would like to add specific details as to the services we provide to Connecticut families when you speak to a staffer, feel free to include them in your call.

Please note, as this effort proceeds throughout the day, the staffers at the congressional offices will have taken many calls on this matter.   Callers later in the day may want to be brief but stress their support for FFELP services and opposition to the conference budget resolution that includes a reconciliation instruction for student loans.

Find your representative here:

http://www.house.gov/Welcome.shtml

Connecticut Senators:

Christopher Dodd (202)224-2823

To email from the web:

http://dodd.senate.gov/index.php?q=node/3128

Joseph Lieberman (202)224-4041

To email from the web:

http://lieberman.senate.gov/contact/index.cfm?regarding=issue

The following fantastic YouTube Video was produced by the folks at The Utah Higher Education Assistance Authority, affectionately known by Utahns across the state as UHEAA (You HEE Uh). They are all about helping Utahns understand the benefits of education beyond high school and then helping them make their educational dreams a reality.  Sound familiar, Connecticut?  Great job, guys! We stand with you and all students.

Please don’t forget to visit the UHEAA-powered website – for more on why we shouldn’t nationalize the student loan program:

http://www.keepstudentloanslocal.org/

Enjoy the video!

We believe a local agency helping local students is better than a bureaucratic, one-size-fits-all Washington program run by a low-bid government contractor. If the federal government nationalizes student loans, YOU LOSE.

What else you can do:

Use your social networks and word of mouth to spread the word to other supporters of our services and the FFELP program, and have them contact their Representatives and Senators to voice their support!
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CSLF on Facebook:

http://www.facebook.com/pages/Rocky-Hill-CT/Connecticut-Student-Loan-Foundation-CSLFSusie-Mae/7001899781

CSLF on MySpace: http://www.myspace.com/first_rate

“Once you’ve got a few of those financial aid award letters in your hands, how do you decide what’s the best choice for you? Before you can make an informed decision, you must decode the financial aid awards and compare the offers.”

Listen to this episode

Download episode – right click & save

Amie: CSLF Podcast 7 – Decoding Your Financial Aid Award

Mariana: Welcome to CSLF’s informational podcast series. The Connecticut Student Loan Foundation, or CSLF, is a non-profit organization dedicated to providing access to funding for higher education through customized and high quality service. We hope to be able to provide you with regular installments of useful, accurate, and up to date student loan and financial aid information. Please feel free to contact us with your questions and comments at our MySpace profile at www.myspace.com/first_rate. You can find our blog at cslf.wordpress.com or find us on Facebook. And, as always, you can visit www.cslf.com. We are your hosts Mariana Evica –

Amie: — and Amie Aragones.

Amie: It’s finally that time of year. Financial aid award packages are in the mail and soon colleges will be expecting your deposit and commitment to attend. Once you’ve got a few of those financial aid award letters in your hands, how do you decide what’s the best choice for you? Before you can make an informed decision, you must decode the financial aid awards and compare the offers.

Mariana: Unfortunately, financial aid offices are not currently bound by rules making the presentation of financial aid information in award letters uniform across schools, so making comparisons can be tough. Some national financial aid organizations have come up with guidelines for schools to follow, but often you may still be missing important information.

Amie: So, how do you decode the financial aid award to compare the options you have?

First, you have to understand the costs associated with attending each school. Many schools don’t provide the “Cost of Attendance” in their financial aid award letters, but it is a crucial piece of information. This should include direct costs paid to the school, such as tuition, fees, room and board, and also “indirect” costs, such as books, supplies, travel or transportation, and incidental living expenses. If it isn’t listed, contact the school’s financial aid office for the total cost of attendance. This is the “sticker price” of the school, before financial aid is factored in.

Mariana: Next, you should see a list of the types of aid you have been awarded. The first thing you need to determine is which portion of your total award is gift aid, and which portion is self-help. Your total financial aid award may be a combination of types of aid, with different requirements and obligations. It isn’t simply an amount deducted from the costs.

Amie: Gift aid is award money that you do NOT need to pay back, and may include scholarships and grants. This is “free money”, and you want to see as much of it as possible. This doesn’t mean there aren’t requirements you need to meet, though. For instance, if a scholarship requires you to maintain a certain grade point average or take a certain number of classes and you fail to do so, you might lose those funds. Make sure you know what is required to keep your scholarship and grant funding.

If you take the Cost of Attendance and subtract out the amount you are awarded in gift aid, this is the true cost to you, and may be one of the most important figures for you to compare from school to school.

Mariana: Self-help is financial aid that you basically have to earn or pay for, including work-study funds and student loans. Loans may not be money you’re expected to pay toward the cost upfront, but it is still money that you will have to repay. It just comes out of your pocket in the future. You’ll want to minimize the amount of debt you will have when you graduate, because you don’t want to start off too far in the hole.

Also, you need to understand the kinds of loans that may be awarded to you. Be sure to listen to our other podcasts for more details on the types of student loans, but here are a few things you should keep in mind now when looking at your financial aid awards.

Amie: If you are considering taking out loans for school, always take any federal loans you qualify for first. They usually have lower interest rates with protections built in for students, like more flexible repayment terms. You can recognize these in your financial aid award letter by name. They are the federal Stafford Loan and the federal Perkins Loan.

Amie: You may also see a federal PLUS loan listed with your financial aid. This is a federal loan, but it is taken out by your parents, and they must agree to be responsible for that debt. If they don’t, or are not approved, that is another portion of your costs that you’ll have to cover another way.

Mariana: If you aren’t sure if all of the costs are being considered in the cost of attendance, or what types of aid you are getting, be sure to ask the financial aid office to clarify that for you.

Amie: What you need to look at is the true cost to you to attend each school, that is the cost of attendance minus gift aid, and compare. Will you need to pay more upfront or repay more in loans to attend one school instead of another?

Mariana: How will you pay for the balance due each year? Will you be over your head in debt when you graduate?

Amie: Of course there are many factors to consider when you are deciding which school to send that deposit to on May 1^st, but these are only a few of the questions you’ll need to ask yourself when looking at how much of the cost of your education will come out of your pocket now, and how much will in the future.

Mariana: If you’d like more information on how to evaluate financial aid awards, the website www.financialaidletter.com has some great information and tools.

Amie: As always, you can call CSLF’s Training and Early Awareness Department at 1 -866-PLAN-4-IF, that’s 1-866-752-6443, and speak with someone who can help you decode your financial aid award.

Mariana: This podcast has been brought to you by CSLF, the Connecticut Student Loan Foundation.

Amie: The purpose of CSLF is to improve the education opportunities of individuals who wish to obtain a postsecondary education. CSLF supports its purpose by promoting access to higher education, by providing services designed to educate individuals about higher education opportunities and by offering affordable financing solutions that best meet the education funding needs of families.

Mariana: For more information, visit our website at www.cslf.com or come to our profile on MySpace at www.myspace.com/first_rate. And you can also read our blog at cslf.wordpress.com.

Amie: You can also find us on Facebook.

Mariana: Information in this podcast was accurate at time of production. CSLF is not responsible for changes in federal regulations, which modify program guidelines or requirements. CSLF reserves the right to discontinue or modify benefits at any time without prior notice.

Amie: This CSLF podcast is copyright of the Connecticut Student Loan Foundation, all rights reserved. April 2009.

Upcoming Obama administration budget proposals threaten local student loan providers, put jobs in peril, end relationships with high schools receiving free college access services, and potentially disrupt how post-secondary institutions schools deliver Financial Aid.

Read on to understand the scope of the disruption, who will be hardest hit, and whom to contact with your concern. 

DON’T LET THE BUDGET PROCESS DRIVE STUDENT LOAN POLICY!

The Administration’s budget proposes an abrupt and potentially destabilizing departure in how student loans are financed and delivered to millions of students and schools each year.  In order to ensure full debate of this proposal, it is vital that Congress not lock this policy into the budget resolution by including reconciliation instructions designed to force action on the student loan proposal in the conference report.

• Although the Administration and the Congressional Budget Office claim the transition to Direct Loans (or a fully nationalized student loan program) will achieve significant savings, these projections do not take into account the costs of servicing and administering these long-term loans over their entire life. The projections also rely heavily on the assumption that the Treasury will continue to be able to borrow long-term at low rates from foreign governments, even as U.S. government debt issuance reaches unprecedented new heights.

• Roughly 35,000 student loan industry jobs would be lost all over the nation. Although some private-sector role would be maintained in the servicing of DL loans, recent Department of Education contracting practice indicates that only a few national servicers would be selected. This plan means the overwhelming majority of employers in the student loan industry would be forced to make huge cutbacks in staffing and that the highly regarded localized services currently provided in the FFELP would be lost.

• Most of the existing college outreach and access programs conducted by FFELP participants would no longer be economically viable. Millions of students and families, especially first-generation students and under-represented minorities, have benefited from these programs.

• Reconciliation is included in the House budget resolution but not the Senate budget resolution. House and Senate conferees will be working out the differences between the two versions over the next couple of weeks.

• The Administration budget proposes to replace the Federal Family Education Loan Program (FFELP) – a successful 40-year public-private partnership that provides post-secondary education access to millions of Americans each year by leveraging private-sector capital – with the Federal Direct Loan Program (DL). This would require the U.S. government to issue roughly one-half trillion dollars in new Treasury debt over five years to raise funds to originate all federal student loans.

• A healthy public debate would reveal the full benefits of the FFELP and the full cost of direct lending. It’s incumbent upon Congress to explore alternative policy prescriptions. To ensure a permanently sustainable source of private capital for student loans into the future, loan providers are developing proposals for policymakers that involve the use of market mechanisms and a simplified loan delivery system.

• The two-thirds of all American post-secondary education institutions that currently participate in the FFELP because they find it a more efficient and effective source of borrowing for their students would be mandated to enlist in DL and required to change their operating systems to accommodate DL.

• Despite the capital markets crisis, the FFELP has continued to supply every eligible borrower with a student loan. This remarkable result, achieved in part with temporary assistance from the federal government that doesn’t cost the taxpayer a dime, stands in contrast to the collapse of other lending markets. Permanent nationalization of student lending is not required to respond to the current temporary financial crisis.

Most Americans agree that government programs work best in partnership with the private sector, and that competition drives price and quality.  Most would also agree that even small government agencies can suffer from too much bureaucracy and too little quality control.  Help us to help you or your student by keeping student loans local to Connecticut as much as possible.

If you wish to get in contact with your representative now, feel free to use the links and phone numbers below. Or, see our “Virtual Hill Day” post, with instructions, a brief script and ideas about timing for maximum effect!

Find your representative here:

http://www.house.gov/Welcome.shtml

Connecticut Senators:

Christopher Dodd (202)224-2823

To email from the web:

http://dodd.senate.gov/index.php?q=node/3128

Joseph Lieberman (202)224-4041

To email from the web:

http://lieberman.senate.gov/contact/index.cfm?regarding=issue

What else you can do:

Use your social networks and word of mouth to spread the word to other supporters of our services and the FFELP program, and have them contact their Representatives and Senators to voice their support!
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Find us on Facebook here:

http://www.facebook.com/pages/Rocky-Hill-CT/Connecticut-Student-Loan-Foundation-CSLFSusie-Mae/7001899781

And on MySpace here:

http://www.myspace.com/first_rate

Here are 5 ways parents can help their child develop an interest in attending college:

1. Take an interest in your child’s friends.

Help promote an academically positive, pro-college culture in your home by listening to what your child and their friends have to say about school and attending college. Tell them about your experiences and encourage them to believe that higher education can be within their grasp. Praise academic achievement and effort. See the numbers on how relevant parents are to their children’s academic achievement and later college attendance:

http://www.hfrp.org/publications-resources/publications-series/family-involvement-research-digests/adolescence-are-parents-relevant-to-students-high-school-achievement-and-post-secondary-attainment

2. Get to know your student’s teachers.

At least twice a year, your child’s teachers set aside time to meet with you in person, which is an excellent chance to get to know them and make plans to support your student’s success. Most teachers are open to calling and emailing,  and would be delighted if you let them know how they could assist your student.  Click here for some great questions to ask at parent-teacher conferences, over the phone or in electronic communications with your student’s teacher(s):

http://school.familyeducation.com/parents-and-school/parent-teacher-conferences/38586.html

3. Encourage independent thought and expression in your child.

As your child moves through high school, a major part of their growth will be developing a healthy sense of self and the ability to resist negative peer pressure. Allowing free expression lets young adults assert their opinions and explore unfamiliar concepts without the negative consequences of bowing to peer pressure. For a great article about listening to your teen and allowing them freedom to express themselves, visit

http://life.familyeducation.com/teen/communication/42914.html

4. Establish a relationship early on with a school guidance professional at your student’s school.

Today’s school counselors are vital members of the education team. They guide all students in the areas of academic achievement, career, personal and social development, helping to ensure that today’s students become the productive, well-adjusted adults of tomorrow.  To learn more about how Connecticut School Counselors are helping students to succeed, visit their web page.

http://www.ctschoolcounselor.org/

5.  Discuss career options and aspirations with your child.

Though most majors don’t have to be declared until your student’s sophomore or junior year in college, it’s never too early for you to discuss career preparation with your student. Talk to your child about a variety of professions, the type of education needed for different careers, and the potential earnings associated with them.  Job shadowing, internships and volunteer work can also help your child discover different career paths too.  Take time with your child to explore websites that highlight the benefits of a college education and that offer insights into a wide variety of occupations.

Click to begin - keep your eyes on the road to success and plan your trip well!

This article was written by Mariana Evica with contributions from Carolyn Karno, Susan Hanchard and other staff members of CSLF’s Early Awareness & College Planning Division. For more free information on college planning and financing, visit http://www.cslf.com/investinyourfuture/resourcecenter.htm or call 1-866-PLAN-4IF.

Mariana Evica writes for the Connecticut Student Loan Foundation and has been serving students and their families since 2003.  Join in the discussion about education, college planning, admissions and financing on Twitter by following Mariana at http://twitter.com/mariana_66 or by becoming a fan of the Connecticut Student Loan Foundation on facebook at http://www.new.facebook.com/pages/Rocky-Hill-CT/Connecticut-Student-Loan-Foundation-CSLFSusie-Mae/7001899781

Please leave a comment or send us an email at alternativeoutreach (at) mail (dot) cslf (dot) org.

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