FFELP Elimination- sounds like socialism

In a recent letter to the Secretary of Education, a friend of mine received a response that bothered me. So in response to his email, I wrote the following letter to Secretary Duncan and have yet to receive a response; wonder why. Perhaps it is because they have figured out I am a 'terrorist' under the DHS new guidelines about pro-life supporters.

Secretary Duncan,

The Obama Administration has recently proposed to eliminate the Federal Family Education Loan Program. Eliminating this program would not only hurt students but also cut nearly 35,000 jobs! In the current tumultuous job market, how does the Administration plan to supply those family’s basic needs once their income is removed? Surely, the Administration does not want these laid-off employees to become another statistic in the increasing unemployment rate and look for more government handouts.

It has been said that the FFELP is “barely functioning” and I question that statement. There are many FFELP lenders and servicers who are functioning and due to the poor economic situation are actually functioning better and more efficiently as they have cut unnecessary items from their budget. I also question the statement that the elimination of the FFELP will save the tax payers any money let alone $4 billion. It is going to cost the taxpayers nearly one-half trillion dollars in new Treasury debt over the next 5 years to even originate the federal student loans. Where exactly is that money going to come from, China again? We cannot borrow from Peter to pay Paul any longer. The elimination of the FFELP is not going to help American students it is going to hurt America by increasing the national debt once again with borrowed money from China.

It appears the past and current Administrations do not understand that in real companies (such as student loan lenders) and households, we have to deal with real money and real numbers. At the end of the month, we cannot have a $11,199,755,734,764.56 debt. We have to deal with real numbers not fictitious “play money”. I again ask where is this money going to come from to originate these student loans?

I have worked for a student loan lender and currently work for a higher education school. The FFEL Program has helped students and parents, not hurt them. It has increased competition and as a result, borrowers have reaped the benefits. The cost of loans for students is lower because each lender wants to compete for their business. They offer incentives in regards to repayment or discounted/no origination fees. Have you ever called the Direct Loan Servicing line? I have. I have a loan with both Direct and with EdFinancial. Direct’s customer service, or lack thereof, is evident from the unpleasant voice that “greets” your call. You receive the same treatment at the DMV or other government-run agencies. Pardon me, but do you ever hear any citizen who enjoys going to a government agency? Do they praise the efficiency or do they dread the trip and the people they will encounter? This is not the case with private lenders. They have to be pleasant because they are competing with others. Competition fosters customer service. Democracy is about competition; socialism loves government control and monopolization. To quote studentloanfacts.org, “Competition in the private sector student loan program has driven down the cost of this program to the point that in both 2003 and 2004 the lenders participating in the FFELP managed the entire program at no net cost to taxpayers – making it the only federal entitlement program to break even.”

America needs LESS nationalization of private corporations and entities and more corporate and government responsibility locally and nationally. I urge you to reconsider your position on eliminating the FFELP and 35,000 jobs of men and women who no doubt have families to support in these tough economic times. We cannot abandon the FFELP and turn our back on the people who have provided the means for students to attend college.