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April 24, 2009

EFC Responds to President's Remarks on Eliminating FFELP

WASHINGTON, D.C., (April 24, 2009) – Education Finance Council (EFC) President Peter Warren released the following statement in response to President Barack Obama’s press conference today, in which the President advocated the elimination of the Federal Family Education Loan Program (FFELP) in favor of the Government-controlled Direct Loan program.

“EFC applauds the commitment of President Obama to enhance college access and opportunity,” Warren said.  “For over forty years, the FFELP has fostered those very goals through the work of its participants -- which include nonprofit and state based agencies.  A cornerstone of the program, these mission-oriented organizations collectively play a significant role in the financing, originating and servicing of FFELP loans.  They are also indispensable hands-on local partners within their communities, offering services to students and parents such as college outreach, debt management and financial literacy education.  Many of these entities would be forced to close down under the Administration proposal.”

“Higher education organizations are now in the process of putting forth proposals for reforming the FFELP so that it can better serve students and taxpayers.  Such reforms could produce savings that could be used to increase college access. EFC is convinced that simply originating all new student loans through the existing Direct Loan program is not the best available option, and we urge Congress and the Administration to work with stakeholders in fully exploring alternatives.”

 
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EFC’s mission is making college more affordable.  Together with its members, EFC works to expand access to higher education by ensuring the availability of student loan funds while striving to make paying for college easier and less expensive for all students and families.  EFC represents nonprofit and state-based student loan providers that participate in the Federal Family Education Loan Program (FFELP) as well as affiliated entities including guaranty agencies, lenders, rating agencies, insurers and investment bankers.