OSLA and other similar agencies across the nation, finance, originate and service the FFELP loans. The FFELP provides federal student loans through a partnership between private lenders and the federal government. We are also indispensable hands-on local partners within our states, offering services to students and parents such as debt management and education during loan repayment.

The President’s budget plan eliminates the FFELP, leaving a monopoly in the student loan industry for schools to use. The player left standing is the government-run Direct Loan program. In this program, of which only a handful of colleges and universities in Oklahoma participate, students and parents obtain loans from the federal government rather than banks and credit unions. Alternatively, schools have chosen FFELP because it encourages lenders to compete with each other to offer the best product for the students. The FFELP does not significantly increase the national debt, yet moving toward the Direct Loan program is estimated to increase the national debt by $1 trillion in less than 10 years.

Higher education organizations are now in the process of putting forth proposals for reforming the FFELP so that it can better serve students and taxpayers. Such reforms could produce savings that could be used to increase college access. Simply originating all new student loans through the existing Direct Loan program is not the best available option, and we urge Congress and the Administration to work with stakeholders in fully exploring alternatives.

OSLA urges Oklahomans to contact their Congressional delegation to make sure the budget proposal is fully debated and that alternatives are considered. Please make sure that the discussion centers on the best solution for students and their families, schools and taxpayers. Eliminating the FFELP is not that solution. For additional information, visit http://www.osla.org.