Group wants to keep loans local

Taking a one-size-doesn't-fit-all approach, the Utah Educational Assistance Authority is organizing a grass-roots campaign to keep student loans local.

As Congress convenes Wednesday, the UHEAA and cohorts across the country are asking Americans to call lawmakers and elected officials as part of "Virtual Hill Day" to express opposition to the proposed elimination of the Federal Family Education Loan Program. Such elimination is part of President Barack Obama's budget resolution, which is currently being discussed by the Senate.

"We think that's fundamentally wrong," said UHEAA director Dave Feitz. "It will result in increased cost and less service to the student and the institutions that UHEAA has served for more than 30 years now."

Feitz said nationalizing the student loan program would leave students with no choice, give lenders no competition, and result in stifled innovation and higher delinquency and default rates.

"You have to ask yourself, who in Washington, D.C., is going to care for the schools and the students in Utah like UHEAA does?" he said.

FFEL enables states to locally service student loans, which Feitz says is imperative.

A coexistence of both programs, he said, would be the best scenario for America's students.

"The services, the benefits that we provide are far in excess to anything that could be provided at the Washington level," he said.

UHEAA administers Utah's student loan guarantee program and also provides outreach and support to Utah students, including counsel to avoid default and delinquency.

"But the bulk of our business is student lending," Feitz said.

By keeping the servicing of those loans local through FFEL, students and families are entitled to get better service at a lower cost to finance a higher education, he said.

Issuing student loans through the National Treasury Department to the millions of new students each year could increase the national debt by a trillion dollars in new borrowing in the next 10 years.

Feitz said loans serviced by UHEAA come from private money and therefore do not add to debt.

R. Dewey Knight, associate director of financial aid for the University of Mississippi, has said the issue is one of such importance that it "deserves careful, deliberate and thorough consideration by Congress."