Submitted by Rita (not verified) on April 25, 2008 - 1:36pm.
The first quarter of 2008 has ended and lenders are settling with the Department of Education for interest and special allowance. Guess what? There was no profit. There was a loss...a fairly big loss. Higher Ed Watch is so left wing I have trouble reading your nonsense, but this one takes the cake. The vast majority of lenders have not abused the system. We work hard with schools and students to have their student loans at the school when the funds are needed and to provide the best borrower benefits we can afford. However, most lenders are for-profit businesses and it makes sense that for us to participate there has to be a reasonable profit. Notice I said "reasonable" which is no where near the level of your "money-grubbing" comment. The ultimate goal of recent congressional action has been to make the Federal Family Education Loan Program so unappealing to lenders that we would all get out of the business and schools would have no choice but to go through the Federal Direct Loan Program. There are a couple of problems with this. First, the FDLP can't handle the total volume. Secondly, congress is supposedly funding increased Pell Grants from the "savings" in the FFEL Program, but what happens when all the lenders drop out? There won't be any savings. Then how will the increased Pell Grants be funded? Both student loan programs have operated side-by-side for several years very successfully. There is room and a need for both. Congress needs to put some of the profit back in the program. Let them include clear regulations to keep lenders on the straight-and-narrow. Then everyone wins, borrowers get their benefits back, schools and students get their choice back and lenders make a little money. Is that really a bad thing?
Money Grab - What Nonsense
The first quarter of 2008 has ended and lenders are settling with the Department of Education for interest and special allowance. Guess what? There was no profit. There was a loss...a fairly big loss. Higher Ed Watch is so left wing I have trouble reading your nonsense, but this one takes the cake. The vast majority of lenders have not abused the system. We work hard with schools and students to have their student loans at the school when the funds are needed and to provide the best borrower benefits we can afford. However, most lenders are for-profit businesses and it makes sense that for us to participate there has to be a reasonable profit. Notice I said "reasonable" which is no where near the level of your "money-grubbing" comment. The ultimate goal of recent congressional action has been to make the Federal Family Education Loan Program so unappealing to lenders that we would all get out of the business and schools would have no choice but to go through the Federal Direct Loan Program. There are a couple of problems with this. First, the FDLP can't handle the total volume. Secondly, congress is supposedly funding increased Pell Grants from the "savings" in the FFEL Program, but what happens when all the lenders drop out? There won't be any savings. Then how will the increased Pell Grants be funded? Both student loan programs have operated side-by-side for several years very successfully. There is room and a need for both. Congress needs to put some of the profit back in the program. Let them include clear regulations to keep lenders on the straight-and-narrow. Then everyone wins, borrowers get their benefits back, schools and students get their choice back and lenders make a little money. Is that really a bad thing?