May 13, 2008

Dear Secretary Spellings:

On behalf of the National Association of Student Financial Aid Administrators (NASFAA), I am writing to express my appreciation for your personal involvement, the Department of Education’s efforts, and the Administration’s coordinated and supportive response to the loan access problems faced recently by Federal student loan borrowers.

The passage by Congress of H.R. 5715, the Ensuring Continued Access to Student Loans Act of 2008, and President Bush’s signing of this bill are a large step forward toward ensuring borrower access to student loans. We congratulate everyone for their quick and appropriate actions to achieve this legislation as well as to smooth the transition process for schools that wish to shift to the Direct Loan program.

In addition to extending my thanks for your efforts, I also wish to call your attention to some continuing concerns of NASFAA members regarding the credit crunch, including timeliness of implementation and assured access to loans.

Timeliness: As we are reaching the height of the award letter season, rapid implementation of the provisions in H.R. 5715 is critical. As always, I am certain the Department will implement the new statutory provisions in a considered manner, addressing the most effective and comprehensive response to the realities of the market. But I also urge the Department to execute H.R. 5715’s provisions before Memorial Day so that its safety nets are operational as soon as possible.

Assured Access: I also wish to express a critical viewpoint that I hope we share. I want to make it clear that NASFAA’s efforts to ensure federal student loan liquidity is to benefit students. Students have become increasingly more reliant on federal and private student loans to finance their education and any disruptions in loan availability could create a barrier to their enrolling in and completing a postsecondary education.

The extent to which FFELP lenders are subsidized by the federal government and the amount they profit from student loans are important aspects of the program that should be openly debated and scrutinized. However, borrower access to student loans should take priority for now and the immediate future. Considering what happened in the sub-prime mortgage market, NASFAA is determined to ensure that a healthy and accessible loan program remains a top priority.

As we advocate for increased liquidity during the credit crunch, NASFAA fully expects that lenders have a moral responsibility not to deny students Federal loans based on the school they attend or any other criteria. I hope you will encourage the lending community to voluntarily provide student loan access to all eligible borrowers at any eligible institution.

This is not about liquidity for lenders; it is about access, success, and choice for students!

Thank you in advance for considering these important matters.

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