Posted by: cslfconnects | March 18, 2009

CSLF incorrectly portrayed as State agency – president Mark Valenti asserts current challenges caused by capital market crisis and cuts to student loan programs

CSLF president Mark Valenti addresses recent statements made in the media in an open letter to school partners, pointing out the nature of economic stressors to the company, the nature of the recent State of Connecticut audit by Johnston and Jaekle, as well as by other regulating bodies, and the need for transparency and clarification of the student loan industry itself.

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March 13, 2009

Dear School Partners:

Recent erroneous reports appearing in one media outlet have questioned the viability and business practices of the Connecticut Student Loan Foundation (CSLF).  Regrettably, this media outlet made no attempt to contact CSLF leadership or staff prior to publishing this information.  Had they done so the release of misinformation and inaccurate reporting could have been avoided.  We feel it is important to set the record straight.

First and foremost, CSLF has funding readily available to make Federal Stafford, Federal PLUS, and Federal Graduate PLUS loans for the 2009-2010 academic year.  In fact, CSLF presently has more than $150 million in funding which we are ready to lend to students.

Further, improving the services we offer to our clients remains a top priority.  We are nearing completion of a major system conversion that will provide state-of-the-art products and services to all of its clients.  These upgrades to our operational processes will help us continue to provide high-quality services to all members of the FFELP community.

CSLF is a non-profit organization dedicated to providing access to funding for higher education.  We are neither an agency nor a quasi-public agency of the State of Connecticut, and as such receive no funding from the State.  Additionally, CSLF has no debts or obligations that are a liability of the State.

Media reports also failed to make clear that the present challenges are solely in the guarantee component of CSLF and were not in any way created by CSLF’s spending, but rather by the current capital market crisis and cuts to student loan programs through the Higher Education Reconciliation Act of 2005 and the College Cost Reduction and Access Act of 2007.  CSLF is working diligently to address these challenges and it bears repeating: CSLF has more than $150 million in funding readily available to make Federal Stafford, Federal PLUS, and Federal Graduate PLUS loans for the 2009-2010 academic year.

In addition to regular internal audits conducted by independent reviewers, CSLF is also subject to oversight from a variety of State and Federal entities.  All of these evaluations and audits of CSLF, from our operating procedures and salaries to management of funds have consistently been positive and have reflected the diligence and commitment CSLF makes to its clients.  Recent reports to the contrary are unfortunately the result of incomplete data collection, inaccurate assumptions and a basic lack of understanding of how the student loan industry operates.  We will be making a concerted effort to educate all interested parties on the intricacies of our business as well as CSLF’s solid record of success.

Our record of supporting students in higher education has been one of success.  Since 2003 alone, CSLF has:

•    Made student, parent and consolidation loans in excess of $1.2 billion.
•    Provided “second chance” loans to individuals totaling more than $313 million.
•    Paid or waived fees on behalf of students amounting to more than $13.4 million.
•    Guaranteed more than 200,000 loans to parents and students amounting to over $1.7 billion and tens of thousands of loan consolidations amounting to over $1.1 billion.

CSLF remains focused on its mission of providing quality education loan products and services to students, parents, and business partners.  As we continue in our work, we will make every effort to ensure that the media, policy makers and most importantly our clients understand CSLF and appreciate the vital role we play in helping students access higher education.  We look forward to continuing our mission and are ready, willing and able to discuss at length CSLF’s operations, funding accounting, trust requirements or any other issues.

Sincerely,

Mark Valenti
President
Connecticut Student Loan Foundation

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