Sen. Al Franken, D-Minn., joined University President Bob Bruininks on Monday to discuss abolishing the Federal Family Education Loan (FFEL) in favor of a Direct Lending program.
The FFEL, initiated by the Higher Education Act of 1965, is a program where the federal government subsidizes banks to give student loans at no-risk to the bank, guaranteeing the loans and allowing banks to keep the profits.
The program has helped about 60 million Americans pay for higher education, but Franken and Bruininks said they don’t feel it is efficient enough.
The Direct Loan program, which was approved by the House of Representatives in September, would cut out the banks from the lending equation.
“Direct lending slashes administrative costs by cutting out the middle man and lending directly to the students,” Franken said.
After his news conference with Bruininks, Franken met with students to hear their concerns about paying for college.
Franken’s visit to the Twin Cities campus was the first stop on a tour of several other schools in Duluth and Rochester to discuss student loan reform.
Bruininks cited a recent opinion poll that stated two-thirds of Americans think the affordability of higher education is a serious national issue.
“When two-thirds of our population think something is important, then it is indeed an important issue,” Bruininks said.
Half of the undergraduate student population receives substantial grants and scholarship assistance, Bruininks said.
“The goal of the University of Minnesota is to save students money, to save families money and to make it a more seamless, direct and efficient process,” Bruininks said.
The University converted to direct loans in 1995.
Direct loans can save the federal government $87 billion over 10 years, Franken said.
Measures in Congress would set aside $40 billion from the savings to increase Pell Grants , something that Franken’s family knows well.
Franken’s wife, Franni , and her three sisters were all supported through college with help from Pell Grants and other scholarships.
Franken said the rest of the savings would be used to increase college graduation rates, expand low-interest student loans and increase the quality of early childhood education programs.
“This all comes down to who should benefit from the student aid and I think it should be the students,” Franken said.
Ryan Kennedy , a first year public policy graduate student at the Humphrey Institute of Public Affairs, said he was able to get his undergraduate degree without going into debt, but graduate school is going to be different.
Kennedy plans to take out a student loan in the near future, but is still worried about paying back his student loans, even if he finds a job right out of graduate school.
“Even if I have ten, fifteen thousand dollars in debt, that’s still not easy to pay,” Kennedy said.
Mandy Stahre, a Ph.D. candidate at the School of Public Health, had her master’s degree and part of her Ph.D. funded by direct loans. As an undergraduate, she took loans from banks.
“I didn't know who owned my loans; it was consistently being sold," Stahre said. "The direct loan program has a very strong infrastructure."
Franken said student loan reform would help students get ahead after graduation.
“This is simply the right thing to do for our students, for our families and for our country,” Franken said.
UMN students have traveled to Florida colleges to collaborate with students on various projects.
When UMN students plan for a vacation, having trip cancellation travel insurance is a worthwhile commodity to check out.
Minneapolis Used Cars
Give back to the Minnesota community with a boat donation at boat4causes.org.
If you have been involved in a car accident call a Philadelphia Car Accident Lawyer for a free consultation.