Student loan borrowers will wind up paying more and have less competition and choice if a bill approved by a U.S. Senate education committee becomes law.
"Yesterday's committee action will mean higher student loan costs for America's working families," according to Dr. Henry Howard, President of U.S. Education Finance Group (USEFG). "These across-the-board-cuts and new taxes on student loans will mean borrowers will have to pay more than they do today."
Howard's warning came one day after U.S. Senators Edward Kennedy (D-MA) and Michael Enzi (R-WY) led the Senate Health, Education, Labor and Pensions (HELP) Committee a step closer to destroying competition in the Federal Family Education Loan Program.
"The bottom line is that these cuts will hurt more people than they would help," Howard said. "While a clear need exists for reforms in the student loan program, Congress should not impose across-the-board cuts that will destroy choice and competition."
He explained that the potential legislation will strengthen the domination of the loan program by three lenders -- Sallie Mae (SLM), Nelnet (NNI) and Citibank (STU). "When the news of this deal was released this week, these companies' stock prices spiked up because Wall Street knows that these across- the-board cuts will squeeze the smaller lenders out of business."
Howard added that smaller lenders like USEFG have promoted price competition and long advocated that colleges expand lender choices for their students to meet rising tuition prices. He emphasized that the Senate bill does not go far enough in preventing colleges from steering borrowers to the larger lenders, and its does not curb skyrocketing tuition. He stressed that Congress should pursue fairer and more equitable alternatives that would enhance competition rather than destroy it.
U.S. Education Finance Group, headquarters in Miami, FL, is an industry leader in the Federal Family Education Loan (FFEL) Program and has helped hundreds of thousands of students and their families finance the cost of higher education. With one of the most diverse workforces and management teams in the student loan industry, USEFG's commitment to diversity and equal opportunity has helped make it a leader in providing education financing for a wide range of borrowers.Labels: academy awards, career training, education online, financial aid, free college, free education, high school, scholarship, student loans, study abroad |
