Notice: Undefined index: articledetail in /home/utils/securefiles/securecode/utl_article.cls.php on line 646
No Comprehensive Analysis of Cuts to FFEL Program, Secretary Says |
College Loan Consolidation, Federal Loan Consolidation, Private Loan Consolidation, Student Loan Consolidation

America's Top Student Loan Provider

No Comprehensive Analysis of Cuts to FFEL Program, Secretary Says
By Carina Zaragoza
Secretary of Education Margaret Spellings asserted that she has not seen any strong evidence that the cuts to the Federal Family Education Loan Program (FFELP) have had negative impacts on students or lenders. Her remarks came after a speech made at the National Press Club on January 9, 2008. Spellings fielded questions centered on the No Child Left Behind Act, among other topics, including the state of the student lending industry.

The College Cost Reduction and Access Act of 2007, enacted on September 27, 2007, cut about $21 billion in federal subsidies to FFELP lenders. Some of these funds were reallocated to the Federal Pell Grant Program, increasing the number of awards and the amount of awards granted. Increasing Federal Pell Grant funds effectively allows more students to have access to higher education by assisting with the cost of attendance.

However, because funds were taken away from FFELP lenders, some observers foresaw a decline in services provided by FFELP lenders. Financial and business analysts anticipated rollbacks of borrower benefits, programs that allowed borrowers to lower the interest rates on their loans. Indeed, many lenders have already eliminated these programs, directly affecting the finances of borrowers. Origination and repayment fees were also anticipated to be introduced on federal loans, making the cost of borrowing money for college more expensive.

Prior to the passing of the College Cost Reduction and Access Act last year, FFELP lenders wrote to Congress asking that they reconsider the amount of the cuts in an effort to prevent programs being eliminated. Lenders lobbied against the bill, anticipating that it would drive some lenders out of business, all to no avail.

Various resources, from economists, financial analyzers, and newspapers to lenders themselves, have reported negative fallout as a result of the Act. Nonetheless, Spellings contended that intermittent reports provide no conclusive, industry-wide analysis of the effects of the cuts. She insisted that she will draw no conclusions from isolated newspaper accounts, though she acknowledged that others will.

It remains to be seen what, if any, effect the Act has on students and lenders, as the provisions of the Act went into effect only a little more than 3 months ago, and many of the provisions will begin in the 2008 to 2009 academic year. However, October 1, 2007, witnessed a broad elimination of borrower benefits from the Federal Student Loan Consolidation Programs offered by FFELP lenders.


Higher Education Washington, Inc.

The College Cost Reduction and Access Act of 2007

Effects of subsidy cuts forecasts (various publications)


Article Title : No Comprehensive Analysis of Cuts to FFEL Program, Secretary Says
Comment not found for this article.

Related articles
• College Financial Aid Options for Non-Traditional Students
• Higher Education Act Renewed
• Student Loan Consolidation May Be The Answer To Your Debt Burden
• Consolidate Federal Student Loans And Save Money
• Financial Crisis Hits the Higher Education Loan Market - What Students Need to Know

Share this story:
  • BlinkList
  • blogmarks
  • Digg
  • Facebook
  • Google
  • Sphinn
  • MySpace
  • NewsVine
  • Simpy
  • StumbleUpon
  • Technorati
  • E-mail this story to a friend!
  • Print this article!
  • Faves
  • Furl
  • Netvouz
  • Slashdot
  • Spurl
  • Yahoo! Buzz

EdFed introduces… Awareness… Learnal
At, EdFed, we proudly introduce 'articles on student loans' and 'Learnal - the journal to learn from', our free newsletter on student loan management, which is sure to keep you informed of the latest events and happenings in the student loan market. To receive your copy of the above just use the RSS feed below and add this to your "My Yahoo", blogs, newstickers, and other similar channels accepting distributable content.
Click here to sign up for our Weekly Newswire now!

How EdFed Helped others!
My consolidation with EdFed has been a great experience and I am happy to recommend everyone I know to you. Thank you for your help.
- Jeffrey R.  Baltimore, MD
* Your Name: * Your E-mail Address:

We respect your privacy.
* Your Friend's name: * Your Friend's E-mail address:
Include a Message:
+ Privacy Policy

Student Loan Consolidation Info - How to Choose the Right Loan Company

This column is sponsored by Granted, America's top job search engine. The Career Resources column is presented by Granted, America's leading job search engine dedicated to getting people jobs.

Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.

read more
Schools Will No Longer Receive Paper FAFSA Forms
(September 20, 2007)

news desk
Stafford Loan Payment Calculator
PLUS Loan Payment Calculator
Loan Consolidation Payment Calculator
Glossary of Terms
Loan Comparison Chart
Scholarship Search
EdFed's borrower benefits program enables you to reduce your interest rate by an additional 0.25% for using our automatic debit program.
US School Directory
Comprehensive List of Schools at which EdFed Assists Students.
EdFed is a FFELP lender with lender identification number 834241.
© Copyright 2020 EdFed. All Rights Reserved.

Home · About Us · Contact Us · News · Sitemap
Career Advice · Tell a Friend · Privacy Policy · Resume Service
Resume Distribution Service · Post Resume · Job Search Course
Sign up for the latest news on student loans.
Email Address:
+ Most Recent Newsletter
+ Newsletter Archives