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All messages are published
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The general topic of this message is Education/Schools:
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Subject:
Student Aid Reform Bill
To:
Rep. Steny Hoyer
October 31, 2009
Congressman Hoyer,
I am a college educated, Mother of two that has been working in Financial Aid for the past 20 years.
I am only just beginning to understand how things work in the political arena but I do understand that the Student Aid Reform Bill has been coupled with the Healthcare Reform Bill. Thanks to Andrew Cuomo the general public has painted my colleagues with a brush earned by a few. This is highly ironic come from a politician....but I digress.
That, coupled with the high profile of the Healthcare Reform Bill, has resulted in virtually no coverage or interest in the Student Aid Reform Bill. I sincerely believe that the few senators that even think about it believe it is the answer to the corruption Cuomo uncovered. Nothing could be further from the truth.
The Student Aid Reform Bill is supposedly going to save $80 billion dollars. I have still not figured out the math behind that number and may never. For this discussion I will accept it. The Bill requires all schools to move to Direct Lending...in other words the government becomes the lender. This is not unlike the highly controversial public option featured in the Healthcare Bill yet it has not seen the light of day.
Jeff Baker, the head of Compliance for the USDE stated in a conference in early October that the USDE does not plan to hire any additional staff to provide the customer service to support 4500 schools that are being forced to move to Direct Lending. Their plan is to contract out the customer service. I will tell you from first hand experience that, at present, the USDE's customer service provided to the FAFSA filers is notoriously poor. Simply put they just do not know enough about Aid to answer the families questions and they create much confusion. Believe me this is easily proven by calling their customer service number and asking a question.
So these already inept customer service "professionals" will be joined by contracted (and no doubt less educated) "professionals" to provide the customer service that the Direct Lending Program represents. The student loan program requires a multi-touch, high level brand of customer service. At present the private lender's fear of losing a student encourages them to higher levels of customer service. When the government takes over that incentive evaporates.
The USDE has seriously overestimated their ability to handle the Direct Lending program. No one seems to care now but once the loan funds get caught in the government's numerous bottlenecks, and students are not able to register for classes, then there will be bedlam. This is what is so frustrating, the aid professionals are forced into the henny penny role but this time the sky really is falling.
Let's get back to that $80 billion for a minute. The current bill allocates $40 billion to fund future increases in the Federal Pell Grant. That is wonderful. What is not explained is where is the other $40 billion going? Every time an objection to this reform bill is raised the first retort is that killing the bill will cause the Pell program to lose funds. That is simply not the case. At best it will reduce the remaining $40 billion floating around.
Ok let's assume the governments wins and they get to be the lender for all schools. Why is the quoted rate that students could borrow at hovering around 6%? Since we all know that the government can borrow at a rock bottom rate why aren't these savings being passed onto the student borrowers? Where is Cuomo when you need him? It appears as if the government is making money on the backs of our students.
If the Direct Lending Program is as great as the President thinks it is why not make it optional? What is the point in forcing all students to borrow from the government directly. This flies in the face of the ideals this country was founded on and quite frankly is a recipe for disaster. Let the schools decide to enter the program on their own. If the government provides superior customer service, and streamlines the process, schools will be banging down their doors.
In my opinion it feels as if the President has identified a way for the government to make money and all else falls by the wayside.
If you have made it this far with a modicum of consciousness I applaud your tenacity. I also thank you for taking the time to listen. This message must get out. The Student Aid Reform Bill is bad legislation. I love working with students and helping all to the goal of a college education. Thanks to the push to Direct Lending I am trying to change careers before hell breaks lose. I refuse to earn my living fighting the government's mindless channels just to get them to release my student's funds.
Lauren Pizzo
Aston , PA
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