Over at Higher Ed Watch, Stephen Burd has a good post on the political chicanery surrounding the end of the Federal Family Education Loan (FFEL) program. Though the Student Aid and Fiscal Responsibility Act (SAFRA), which will end FFEL program lending, has yet to pass in the Senate (it passed in the House in September), FFEL will be ending soon anyway—the emergency law propping it up expires this summer, and no one thinks it will be renewed.
So, late last month, “Secretary of Education Arne Duncan sent a letter to colleges that have not taken any steps yet to start preparing for a possible conversion.”
The reaction from the student loan industry’s most steadfast allies, such as Sen. Ben Nelson (D-NE), was fierce. They accused the federal government of trying to bully schools into a federal takeover of the loan system.
Burd does a nice job debunking this:
At Higher Ed Watch, we believe these allegations are outrageous. Duncan is not asking colleges to flip the switch and make the shift to the Direct Loan program right away. He is simply urging colleges to prepare for the possibility that they will have to transition to direct lending when [the temporary law] ends. This is indeed the prudent course to take.
After all, Obama adminstration officials know that if there are any disruptions in student loan delivery next year, [Sen. Mike] Johanns [(R-NE)], [Rep. John] Kline [(R-MN)], and Nelson will be among the first to go on the attack, accusing the Education Department of being inadequately prepared. In fact, these lawmakers want to have it both ways. They want to impede the Department’s efforts to get colleges ready for a possible conversion but then also be able to blame the administration if any mishaps occur.