Since President Obama has taken office he has encountered nothing but tumultuous times. His actions in office thus far have been direct, and have been different than we have seen for many years, now without getting into an argument over the effectiveness of his policies I would like to bring to light an issue that could affect all of us in education.
In President Obama’s 2010 proposed federal budget, he has recommended for the elimination of the Federal Family Education Loan (FFEL) Program. Basically, these are private lenders who provide funds that are guaranteed by the federal government; they compose roughly 70%-80% of all student loans guaranteed across the nation. The president has proposed to do away with this system and revert back to the Direct Loan Program. This would mean that all student borrowers would borrow directly from the U.S. Department of Education and not from the lenders who have provided the massive majority of student loans in the FFEL program.
This is an issue that is being hotly contested among FFEL lenders and participating schools. This would mean a massive change in paradigms among participating schools as well as an elimination of roughly 35,000 jobs across the country due to the collapse of the FFEL lenders.
Let me know what you think. I would caution, that if you don’t know how this would affect you it is worth researching. Asking questions can never be considered a foolish action. I will update on this debate as it is currently being dealt with by lobbyists all over the country.