NASFAA members have diverse and sometimes conflicting opinions about the student aid proposals proposed by leading Democrats in Congress and the Obama administration. The proposed elimination of the Federal Family Education Loan Program (FFELP) has polarized some members who are passionate about maintaining FFELP or eliminating FFELP. This divide presents a considerable challenge to NASFAA when it advocates changes to the student aid reform package. In the face of this polarity, NASFAA has attempted to focus on long-range needs and goals, and to broker the best possible solution in the context of the current political reality.
As it has done in the past, NASFAA has tried to remain neutral when it comes to the FFELP vs. DL debate. Instead, we have focused our efforts on ensuring that any change to the student loan system will be as effective and easy to implement as possible. NASFAA's approach has brought heat from aid administrators, lawmakers, and colleagues from both sides of the debate who feel that NASFAA needs to take a stronger stance either for or against FFELP elimination.
To illustrate this, we are answering some common questions/criticisms we've received from members on both sides of the FFELP/DL debate. We recognize that we'll never be able fully satisfy all members -- especially when it comes to something as divisive as eliminating FFELP. Similarly, we know that there is no such thing as a perfect bill. Despite these realities, NASFAA will continue to advocate for improvements to the student aid reform package being considered by Congress and will continue to bring members the most accurate status reports. Not to say something solely because it may be unpopular with some or many of our members would be irresponsible on our part.
I am disappointed that NASFAA's advocacy positions do not reflect my position on the SAFRA. I oppose/favor (NASFAA has received comments on both sides of this issue) the proposals in SAFRA.
NASFAA has always tried not to take sides in the FFELP vs. DL debate. NASFAA has a diverse membership, made up of schools from all sectors and participating in every program under the sun. We do our best to represent the interests of the majority of our members, without overlooking the needs of those in the minority.
NASFAA is deeply concerned about the possible elimination of FFELP and how this will affect students, parents and financial aid offices and we have highlighted these concerns to anyone who will listen. At the same time, it is vital that NASFAA has a say in the student aid reform package. Because we don't want to be excluded from negotiations on student aid reform, we continue to "play ball" with Democrat leaders in Congress. However, instead of fully endorsing the student aid reform package, NASFAA has expressed support for certain provisions -- most notably Pell Grant increases -- and highlighted members' concerns about other provisions in an effort to increase need-based grant aid and provide administrative relief for schools.
We continue to provide advice and support to schools and state and regional associations that oppose or support this legislation outright. But as a national association, we are doing our best to represent all our members' views by taking a more nuanced approach.
Why hasn't NASFAA backed SAFRA since it does so much for students?
NASFAA vocally supports some provisions in the bill -- especially increases for Pell Grants. But we can't unconditionally support the bill because so many members have serious concerns about other provisions in the bill. Specifically, NASFAA is concerned with the proposal to drastically change the Perkins Loan Program by changing the allocation formula, eliminating borrower benefits, and not providing matching fund waivers or other alternatives that exist in other campus-based programs. We also have concerns about the time institutions will be given to convert to Direct Loans without safety nets for any resource-strapped schools that can't convert in time. We're working with the Senate to provide schools with some administrative relief if they are forced to switch loan programs by July 1, 2010. We also have concerns about the asset caps imposed by the House, since they could make some currently eligible students and families ineligible for Pell Grants and loan subsidies.
NASFAA remains hopeful that Congress will develop a student aid reform package that we can fully support. While SAFRA has many good provisions, it raises too many concerns among our members for us to support fully and unconditionally.
I have not been able to find any student organization that opposes SAFRA. Why wouldn't NASFAA support these students?
NASFAA has taken steps to strengthen its relationships with the student groups in the past few years and we enjoy working with them. In many other instances our positions stand lock-step with student groups. But NASFAA does not use the policy positions of other groups, associations, or organizations as the litmus test for our own policy positions. Student and other groups sometimes lack the sophistication and familiarity with the complex student aid programs we deal with. Some may see dollar signs but miss the hidden minefields that may work against their best interests.
Why is NASFAA not supporting a continuation of FFELP?
NASFAA has not called for the elimination of FFELP. However, we recognize that FFELP is not functioning very well. It is currently being propped up by Congress through the Ensuring Continued Access to Student Loans Act (ECASLA). Democrat leaders have said they are not interested in renewing ECASLA beyond June 30, 2010. Currently, there is an enormous amount of momentum in Congress to eliminate FFELP and use the resultant savings to pay for increases in the Pell Grant, and provide funding for other higher education and K12 programs. Instead of taking ourselves out of the game, we are trying to improve the package Congress is currently debating. This seems to be the best way to address the many concerns of members currently in FFELP.
There is not enough time for our school to convert to Direct Loans by July 2010. Why hasn't NASFAA asked for an extension for schools that cannot convert?
NASFAA has in fact sought an outright extension of FFELP for schools that cannot make the conversion by July 1, 2010. We received a resounding "no" from lawmakers on that point. NASFAA continues to advocate for a delayed implementation of several other HEOA and financial aid provisions to provide some administrative relief to institutions. However, the best way for schools to ensure their students have access to student loans is to prepare today -- even if it may not ultimately be needed -- to make loans through the Direct Loan program.
Why would NASFAA advise schools to prepare to make loans through the Direct Loan program even though this has yet to become law?
NASFAA is asking schools to prepare for this possibility, not out of a policy position, but to ensure your students will have access to loans no matter what happens. Part of our role as a national association is to prepare schools for the strong possibility of legislative or regulatory changes that could have a major impact on schools' operations.
There is no guarantee that FFELP will be operational after July 2010. We want to make sure that members are prepared for this possibility so students continue to have seamless access to student loans. The best way to ensure students have seamless access to loans next year is to prepare to make loans through the Direct Loan program. Preparing for such a transition in no way obligates institutions to participate in the Direct Loan program.
Does NASFAA expect SAFRA to become law?
No one can say for certain whether Congress will be able to pass student aid reform. Before SAFRA becomes law, the Senate must pass its own version of the bill, likely through the budget reconciliation process. Budget reconciliation may result in a "trimmed down" Senate bill since parliamentary rules prohibit "extraneous matter" from being considered in the bill. House and Senate leaders will then have to negotiate the differences between the two versions of the bill and the negotiated version will have to be passed by both chambers before it is sent to the president to sign.
Regardless of the outcome of the student aid reform effort, NASFAA believes there is a good chance that FFELP will be severely limited next year. Even if Congress fails to pass student aid legislation this year, it is unclear whether FFELP will continue to exist without an extension of ECASLA, which Congressional leaders have said they are unwilling to extend.
When does NASFAA expect final legislation?
We may not have a final student aid reform bill until the end of the year. Education legislation in the Senate is dependent on healthcare legislation currently being debated. If Senate Democrats cannot garner enough support for a filibuster-proof majority to pass healthcare reform, they will likely use budget reconciliation procedures to combine it with student aid legislation to pass one bill. The Senate HELP Committee will likely release an education bill for markup shortly after healthcare legislation has been cleared by Congress. Some have predicted education legislation in the Senate as early as November, while others are not expecting legislation until December or later.
Posted 10/26/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
