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Financial Aid: President Obama is not forgetting about students
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With an economy in muddy waters and tuition costs rising, who wouldn’t be in favor of more financial support while in college? Fortunately for continuing students, there’s a glimmer of hope.
On Friday, April 24 President Obama reaffirmed his plan to move us all into a direct loan system where college students across the country can get financial aid straight from the government. He made it clear that he wants to cut out the middleman from the student loan lending process (private lenders, banks, etc.) that are making money off of these subsidies. By taking back the money made from private lenders, the president then wants billions channeled to increase Pell Grants and their eligibility to reach out to more students. Now that he’s in the White House, it’s time for him to deliver the change he told so many students to believe in.
During his recent speech, the president explained the difference between the Direct Loan program and private Federal Family
Education Loans.
“There’s only one real difference between direct loans and private FFEL loans. It’s that under the FFEL program, taxpayers are paying banks a premium to act as middlemen, a premium that costs the American people billions of dollars each year. Well, that’s a premium we cannot afford, not when we could be reinvesting that same money in our students, in our economy, and in our country,” President Obama said.
BSU has understood for a long time the beneficial logistics of choosing to go through direct loans. We’ve gone through direct loans with the government without the filtering of private lenders longer than I’ve been alive. We’ve been on the side of history that has looked out for the student’s pocketbook by promoting a smarter system.
“There have been studies that show it’s (direct loans) more cost effective. The theory behind the cost savings is that the subsidies that would otherwise be paid to lenders would be redirected into grant programs for students,” said Director to Boise State’s Finanical Aid Office,
David Tolman.
The National Direct Student Loan Coalition couldn’t agree more. According to Roberta Johnson, Chair of the NDSLC, “Presidential budgets for many years have consistently shown that the Federal Direct Student Loan Program is less expensive to American taxpayers.”
Of course, lobbyists and those that are connected with them will always try to defend the lenders and their special financial interests over the future degree holders of America. With irresponsible bank practices included, in the end I’m still going to take the same position as this fellow BSU student.
“I think that with all the banking problems that have been propagating, I feel much more apt to leaving them completely out of the loaning system for students. Having the government administer loans directly with colleges makes more sense,” political science major and BSU senior Aaron Mabey said.
STEVE MERCADO
Arbiter Journalist
