Competition & Choice for Education Lending

The time has come that we need EVERYONE to weigh in one last time so Senators Bond and McCaskill have a clear understanding of how Missouri colleges/universities and their constituents feel about the pending Student Aid and Fiscal Responsibility Act

All stakeholders, including higher education institutions and the lending community, agree with the President?s main objectives: to create better student loan programs for students, schools, and taxpayers and to secure a historic level of savings for Pell Grants.

Student Loan Community Proposal

With a few enhancements to the Administration?s proposal, as outlined in the Student Loan Community Proposal, choice and competition in loan servicing and loan origination can be preserved by affording numerous originators and servicers, including smaller, regional, state and non-profit providers, the opportunity to compete to provide quality service to students.

More than 30 members of the student loan community ? including, non-profit state agencies, stand-alone lenders and loan servicers, consumer banks and non-profit state-based guaranty agencies and secondary markets ? have signed on to the Student Loan Community Proposal.

Key features

? Supports a historic increase in Pell Grant Funding

? Preserves choice and competition in the federal student loan program

? Eliminates lender subsidies and engages private sector to deliver high-quality services on a fee-for-service basis

? Leverages low-cost federal funding

? Keeps the loans on the government?s books so they earn the net interest income

? Reduces defaults by requiring ?risk sharing? for all student loan servicing

? Extends repayment and graduated repayment for borrowers

? Eliminates massive transition risk of requiring 4,000 schools to immediately move to the government?s loan system

Whereas, student loan providers employ hundreds of residents of across the United States and in Missouri; and,

Whereas, student loan providers in Missouri have supported families in Missouri for many years by providing college access information, financial literacy, and customer service to families seeking information; and,

Whereas, student loan providers and their employees have been strong supporters of community-based organizations in Missouri; and,

Whereas, proposals in Washington, D.C. to restructure federal student loan programs could result in the needless elimination of jobs in Missouri and across the United States; and,

Whereas, we believe that competition and choice reduce transition risks and ensures the best products, customer service and delivery of education loan funds to our students and children; and,

We, the undersigned residents of Missouri urge Members of our Congressional delegation to fight to protect good, family-supporting student loan industry jobs in our communities and options for students, while restructuring federal student loan programs and investing savings in need-based college financial aid.