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April 28, 2008

Dear Chairman Kennedy and Ranking Member Enzi:

On behalf of the National Association of Student Financial Aid Administrators (NASFAA), which represents nearly 3,200 postsecondary institutions serving over 14 million students each year, I am writing in support of H.R. 5715, Ensuring Continued Access to Student Loans Act of 2008. We urge all Senators to vote for this legislation when it is debated on the Senate floor this week.

NASFAA also supports other possible legislative solutions and we urge the Congress to enact those in order that all options are available to ensure the credit needs of borrowers are met and, therefore, the Administration has a wide array of tools available to use should other implemented options prove inadequate to meet the challenges that may emerge in the near term.

The lack of liquidity in the credit markets threatens to create a widespread Federal Family Education Loan Program (FFELP) loan access problem as more lenders suspend their FFEL programs each week.

This legislation is crucial because any disruption of the federal student loan program will have the greatest negative impact on low-income and disadvantaged students-the very students the financial aid programs are designed to help. The safety nets contained in the bill will ensure there is no disruption in federal student loan borrowers’ access to credit. The bill also contains helpful loan provisions benefiting borrowers.

NASFAA supports H.R. 5715 because it would:

  • Increase annual and aggregate Stafford loan amounts

  • Allow parent PLUS borrowers to receive in-school deferment and a six-month grace period for children who are currently in college

  • Allow the Department of Education to act as a secondary market of last resort to infuse liquidity into the federal student loan marketplace

  • Allow guaranty agencies to act as lenders of last resort on an institution-wide basis

While we believe we must have in place legislative solutions that H.R. 5715 provides so that federal agencies have the necessary guidance and tools to avert any credit crisis, it is NASFAA’s fervent hope that such tools may never be needed. Indeed, the very fact that the Congress puts into place safety nets may be enough to restore confidence in the federal loan system’s markets, making the use of such safety nets moot.

For all of these reasons, NASFAA urges all Senators to vote for H.R. 5715.

Sincerely,

Dr. Philip R. Day, Jr.
President and CEO
National Association of Student Financial Aid Administrators


National Association of Student Financial Aid Administrators (NASFAA)
1101 Connecticut Avenue, NW, Suite 1100, Washington, DC 20036
Phone: (202) 785-0453; Fax: (202) 785-1487; Web: www.NASFAA.org