ProtectStudentChoice.org Opposes the U.S. Department of Education's Forceful Approach to Reforming the Student Lending Process

Wed Oct 28, 2009 11:44am EDT

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ProtectStudentChoice.org Opposes the U.S. Department of Education's Forceful
Approach to Reforming the Student Lending Process



WASHINGTON, Oct. 28 /PRNewswire-USNewswire/ -- ProtectStudentChoice.org, a
grassroots coalition of state and local student loan service professionals,
criticized today the U.S. Department of Education's heavy-handed tactics
pressuring universities to make changes to the student lending process even
before legislation to mandate such changes has been considered in the Senate. 


According to yesterday's New York Times, Secretary of Education Arne Duncan
wrote to thousands of academic institutions urging them to prepare for
impending reforms that haven't yet been voted on. As reported in the New York
Times, Robert Shireman, the deputy undersecretary of education said, "Some
campuses are thinking they'll wait until Congress acts, but to wait is to
endanger loan access for students." 

Under H.R. 3221, the Student Aid and Fiscal Responsibility Act, all colleges
and universities would be forced to convert to an expanded Federal Direct
Lending system by July 1, 2010. This government takeover would force academic
institutions to meet unrealistic compliance goals.  The direct lending system
also eliminates choice and competition for universities and students in the
lending process and threatens 35,000 jobs in the student loan industry across
the county.

Responding to the Department's effort to convert to a Direct Loan program,
Elaine Larson, Director of Student Financial Planning at Centre College in
Danville, KY says, "Colleges are concerned about additional costs. July, 2010
is the projected date of implementation; however, colleges must have lead time
to change brochures and inform students of the new potential changes should
the proposed law pass.  Six months is not enough lead time.  We are a small
office with two professional staff serving 1,200 students."

Mr. Shireman stated in the New York Times it will take as little as three
weeks for financial aid offices at colleges and universities to transition to
direct lending. Changes will involve retraining or restructuring financial aid
staff and procuring and shifting to new computer systems. With financial aid
offices planning for their next academic year far in advance,
ProtectStudentChoice.org maintains that this is an insufficient amount of time
to make thousands of institutions overhaul their systems, procedures, and
practices.

Joan Crissman, Interim President and CEO of the National Association of
Student Financial Aid Administrators (NASFAA), wrote in a letter to the House
Committee on Education and Labor, "Our members continue to be concerned about
the proposed timeframe to move all schools into the Direct Loan program. Based
on when these proposals could become law, schools will have much less than a
year's time to implement a large program change." 

With no hearings yet in the Senate to discuss the student loans issue,
ProtectStudentChoice.org agrees with NASFAA and disputes the Department of
Education's assumption that this new legislation will pass without any public
debate or scrutiny on the topic. 

Visitors to the website -- www.protectstudentchoice.org -- can get details
about the initiative's alternative student loan proposal and join over 8,500
other individuals in signing an online petition to Congress to preserve
student and university choice and 35,000 jobs.

Website: www.protectstudentchoice.org
Facebook:
http://www.facebook.com/pages/Keep-Student-Loan-Choice-Protect-Local-Jobs/142122977267
Twitter: http://twitter.com/StudentChoice


SOURCE  ProtectStudentChoice.org

David Silverstein, +1-202-683-3126, dsilverstein@qorvis.com, for
ProtectStudentChoice.org
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