Blogs:

It is time for the legislation to pass into a law President Obama’s proposal to do away with FFEL or Federal Family Education Loan program. Those who consider themselves authority in the financial aid world as expected have started raising undue alarms scaring the students and parents. They spread rumours that enhance insecurity among students that the proposed changes are sure to be harmful to their interests.

For example, reports and press releases from reputed organizations such as CBA or the Consumer Banker’s Association refer to this bill as a setback for students. Now, the question is, are they really unaware of the whole scenario or just looking for any opportunity to press the panic button?

It is absolutely clear that the legislation will be using the FFEL savings to enhance the Pell Grants spending by another $40 billion. It will also be focusing on expanding significantly the Perkins Loan Program providing loans on low interest enabling students who are financially disadvantaged to avoid going in for exorbitantly priced private student loans.

Supposed advocates of student financial aid raise the point that removing FFEL could completely eliminate selection of lender by students.  Firstly, it would do them well to remember various scandals in the past which made it very clear that students practically did not have a choice in the FFEL program. In spite of Congress’s efforts to pass legislation that will force colleges to recommend at least three preferred lenders to students and leave the choice to them. However, colleges will continue supporting their favoured lender to a majority of students and this cannot be prevented.

Fact remains that a borrower has really no choice over the borrowing as well as whom he borrows from whatever the program they come under. Another aspect to consider here is all lenders lending money under a scheme offer the same terms for borrowers. So, why exactly should the choice of borrowers come into picture here? It hardly matters for a student borrowing under a particular scheme whether he is taking the loan from X or Y as all terms and interest rates remain the same.

Most of the students are just thankful they have an opportunity to borrow and pay their higher education fees. They actually don’t care about where the money comes from as long as it is accessible to them and they are able to realize their dreams. The same goes for the parents too. So, blowing up a scenario like this and waiting to jump at the administration for any opportunity does not do anything to further the student cause. Creating a panic and scare among already harassed student speaks volumes of the sadistic tendencies of the perpetrators of these rumours.

The administration is doing their job well enough and students know what exactly they are up against. So, let us let them be and allow the process to go about in a smooth manner with a focus on overall development of the situation.