Uncle Sam the Lender

Jeff Wendt

Wending its way through Congress is the Student Aid and Fiscal Responsibility Act (SAFRA). SAFRA will end student lending as it's been conducted for some 40-odd years.

Banks will be out. Uncle Sam will do all the lending, regulating and collecting. Thousands of U.S. campuses will be partners.

Here are plain language interviews about SAFRA with informed people and without much political advocacy.

Arne Duncan
U.S. Secretary of Education

SAFRA legislation that passed in the House of Representatives is stalled in the U.S. Senate. Mr. Duncan held a press conference on Tuesday, February 17. Here are excerpts.

Claudio Sanchez
National Public Radio

Claudio Sanchez follows campus topics and broadcasts to a national audience. Jeff Wendt spoke with him an hour after they both attended Secretary Duncan's February 17 press conference.

Kerri Moseley-Hobbs
Sojourner-Douglass College

How is SAFRA affecting the operations of an urban college with 2,900 undergraduates, graduate and professional students?

Terry Kell
University of Wisconsin, Madison
SAFRA legislation also affects Perkins loans, which will affect this large school in a large way. Terry Kell explains the changes and their likely impact.

Elena Lubimtsev
Edamerica

We caught Ms. Lubimtsev in Tennessee briefing her company's home office on the progress of SAFRA legislation on Capitol Hill, where she's posted. Her explanations of a complex nationalization of the student loan industry are accompanied by a unique personal twist.

Joe Kakaty
College Loan Corporation
Kakaty's firm left the business of Stafford and PLUS loans a year ago and is making plans to re-enter the private loan business once the dust settles.

Shelley Saunders
American Student Assistance

A guarantor's representative on the Washington scene says the voices and best interests of students and families are missing from the proposed legislation.

Alan Collinge
StudentLoanJustice.org
Alan Collinge is a student loan activist whose organization represents thousands of former college students who've run afoul of Uncle Sam's student loan system. How well is the federal government doing in the student loan business, in
his opinion?

Your colleagues want to hear your thoughts as well. Add your comments below.

TOPICS: Executive Briefing, Finance, Student Services

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John Brown
3/1/2010 12:15:39 PM
I think Direct Lending is good if there is a way to consolidate the student loans with the parent loans. Students are only given so much money while the bulk of the loan falls on the parents. In the end the parents will be in debt up to their ears. While everyone else is getting their education paid for because of need.

Joe McCormick
11/30/2009 11:21:20 PM
If we keep doing things the way we have always done them, we will keep getting the results we have always gotten. It is past time to retire FFELP and now time to have one uniform federal loan program to provide adequate loan capital to students, i. e. the William D. Ford Direct Loan Program.

The Larch
11/17/2009 2:43:54 PM
DL is so much easier for everyone, especially students. This from someone who has worked in both programs for years, without allegiance to either. RE: Al Collinge, he is still making excuses for making the conscience decision to go into default on his student loans. Anyone seeking so many degrees is really delaying their professional life, not marketing themselves effectively.

Business Analyst
11/17/2009 8:54:10 AM
To Robert Brown's comment "Truly remarkable that your journalistic talents couldn't turn up a single person who supports the changes Congress is making", I would add that maybe it is because the change is not in the best interest of the student/parent and it suppresses capitalism.

Robert Brown
10/19/2009 4:06:00 PM
Truly remarkable that your journalistic talents couldn't turn up a single person who supports the changes Congress is making.

jjcnpa
10/19/2009 10:46:02 AM
For those schools that converted over to Direct Lending, 74% said it was easier than expected. These "observations" are all propoganda. FFELP leaves our students vulnerable and we couldn't make the switch fast enough to Direct Lending.

Financial Aid Administrator
10/19/2009 9:08:17 AM
Today's Campus bills this piece as comments from "informed observers." With the exception of Alan Collinge, these observers have a financial interest in the outcome of the debate. SAFRA does not nationalize student lending. How do you nationalize a federal program? The federal government has simply decided to stop paying a middle man to do a job it can do cheaper, and to use the money it saves to increase grant aid for college students and improve education in general.

Margaret Lawrence
10/16/2009 2:35:29 PM
Can the government take over billions of dollars of student loans all at once without imploding?

Concerned parent
10/16/2009 1:09:01 PM
I don't get it! Congress can't seem to put forward a health insurance reform bill with a government option (even only as a back-up if insurers fail to step up to the reform plate). But those same legislators are pushing a student loan reform bill that totally eliminates a private lending option forcing rapid, dramatic change to a nationalized program and punishing colleges and universities, students, families, student loan companies and guarantors for the minor excesses of a few.

Martin Williams
10/16/2009 12:20:31 PM
Direct lending seemed like such a good idea. I'm not so sure any more.

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