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News Now

Washington
House votes to eliminate Ed. Loan program
WASHINGTON (9/18/09)—The House voted 253-171 Thursday in favor of H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009, which would terminate the Federal Family Education Loan Program (FFELP). The Obama administration has estimated that eliminating the subsidies provided under FFELP could save the government more than $4 billion, annually. A portion of that $4 billion savings could then be used for direct loans to low-income students through need-based Pell Grants, the administration has said. The Credit Union National Association (CUNA)opposes elimination of the student loan program and has expressed concerns to lawmakers that an elimination of FFELP private student funding would remove a "valuable option" for students. More than 1,000 credit unions provide student loans, according to CUNA, with a particular concentration among credit unions that base their membership around a university. Credit unions that provide direct student loans also provide individualized service and support to loan holders, but these services would be jeopardized if the FFELP is discontinued, CUNA has warned. The next stop for this bill is the Senate. A comparable bill has not yet been introduced there.


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