Submitted by Harris Miller (not verified) on April 30, 2008 - 1:37pm.
My good friend Art knows much more about student lending than I, but there are some inaccurate or incomplete statements in his analysis that I would like to correct. I am not confident that even if he accepts my points he would support the Kennedy/Miller/Enzi/McKeon legislation, as virtually all of higher education does, but I hope he would.
First, increases in unsubsidized Stafford loan limits to help students fill the gap are not "a raid on the Treasury." They do not cost the taxpayers a cent. They generate a "profit" for the government, money that can be used to increase grants to the neediest students, for instance. The overall bills offered in the House and Senate are cost neutral.
Secondly, as Mark Kantrowitz and others have demonstrated, it is a myth that particular sectors of higher education are more harmed by the drying up of private lenders than others. NPSAS data show that 20% of private loan borrowers attend for profit colleges, 32% four year public institutions, 32% four year not for profit private colleges, and 15% community colleges. So students, whatever their choice of higher education path, are suffering from a dearth of private lending.
Thirdly, Art is correct that relatively few FFEL lenders, if one takes 2000 lenders as the base, have withdrawn in whole or in part from student lending. But he also knows that the lenders that have withdrawn, because many of them have been major FFEL players, constitute a high percentage of the lending volume. Some have estimated 15% of the FFEL volume is gone. On top of that, some of the lenders that remain have begun selective lending, dropping many community colleges, career colleges, and other institutions with high percentages of lower income students and minorities. Finally, dependent students can get PLUS loans if their parents agree and qualify; independent students cannot, as he knows.
So unless Congress creates a new program for independent students equivalent to the PLUS program (which CCA supports), an increase in loan limits for independent students greater than that for dependent students makes sense.
Harris N. Miller, President/CEO, Career College Association
Corrections on Some Facts
My good friend Art knows much more about student lending than I, but there are some inaccurate or incomplete statements in his analysis that I would like to correct. I am not confident that even if he accepts my points he would support the Kennedy/Miller/Enzi/McKeon legislation, as virtually all of higher education does, but I hope he would.
First, increases in unsubsidized Stafford loan limits to help students fill the gap are not "a raid on the Treasury." They do not cost the taxpayers a cent. They generate a "profit" for the government, money that can be used to increase grants to the neediest students, for instance. The overall bills offered in the House and Senate are cost neutral.
Secondly, as Mark Kantrowitz and others have demonstrated, it is a myth that particular sectors of higher education are more harmed by the drying up of private lenders than others. NPSAS data show that 20% of private loan borrowers attend for profit colleges, 32% four year public institutions, 32% four year not for profit private colleges, and 15% community colleges. So students, whatever their choice of higher education path, are suffering from a dearth of private lending.
Thirdly, Art is correct that relatively few FFEL lenders, if one takes 2000 lenders as the base, have withdrawn in whole or in part from student lending. But he also knows that the lenders that have withdrawn, because many of them have been major FFEL players, constitute a high percentage of the lending volume. Some have estimated 15% of the FFEL volume is gone. On top of that, some of the lenders that remain have begun selective lending, dropping many community colleges, career colleges, and other institutions with high percentages of lower income students and minorities. Finally, dependent students can get PLUS loans if their parents agree and qualify; independent students cannot, as he knows.
So unless Congress creates a new program for independent students equivalent to the PLUS program (which CCA supports), an increase in loan limits for independent students greater than that for dependent students makes sense.
Harris N. Miller, President/CEO, Career College Association