In a letter to Senate Majority Leader Harry Reid yesterday, six Democratic senators voiced support for reforming the student loan programs to increase Pell Grants, but urged the majority leader to consider "alternative legislative proposals" to the president's proposal to move to 100 percent Direct Loans.

"Increasing our nation's commitment to higher education funding is a priority, but we must proceed toward this objective in a thoughtful manner that considers potential alternative legislative proposals, while still delivering an equivalent amount of savings over the next ten years," the letter states.

The Senators expressed concern about potential job losses from moving to 100 percent Direct Loans. The signers - Senators Bill Nelson (D-FL), Tom Carper (D-DE), Blanche Lincoln (D-AR), Jim Webb (D-VA), Mark Warner (D-VA), and Ben Nelson (D-NE) - all represent states with FFELP-based employers.

Supporters of the president's proposal have called into question the numbers of jobs that would be lost by switching to Direct Lending given that multiple FFELP servicers have already been awarded Direct Loan contracts and that H.R. 3221 -- the Student Aid and Fiscal Responsibility Act -- retains a role for state nonprofit agencies.

Posted 03/10/10 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.