Can the government save money by eliminating banks from student loans in the Obama proposal?
The savings claim is $87 billion over ten years, but last week the Congressional Budget Office recalculated the savings, reducing it to $47 billion over ten years. That is still a substantial savings, but the loss of default prevention education, person-to-person programs and local customer service for students who are experiencing the first loans in their lives, will leave a profound effect. Instead of ending the FFELP, Congress should be strengthening it. What impact does this have on students and parents? A giant impact. With the exception of one university and one college, all of the Oklahoma colleges and universities participate in the FFELP, accounting for 88 percent of the student loans in our state. In Arkansas, the majority of schools participate in FFELP, totaling 94 percent of the student loans. These schools would be forced to transition to the Direct Loan program and with 4,000 schools nationally (70 percent of schools are in the FFELP) changing at the same time, the abili
