Press Release

COLLEGE STUDENTS OVERWHELMINGLY SUPPORT
STRENGTHENING FEDERAL STUDENT LOAN PROGRAM

Without Enough Loans from Federal Student Loan Programs, Students Say They
Have to Work More Hours, Take on Higher Interest Debt or Leave School

WASHINGTON, DC - Sept. 17, 2003 – Student loans are more important than ever to America’s college students. That is one of the key findings of a new nationwide survey of college students conducted by KRC Research on behalf of The Coalition for Better Student Loans. Among the survey’s highlights:

• 92 percent feel that the financial assistance provided low and middle income students and families through the federal student loan program is more important today than it was just a few years ago.
  
• 91 percent of college students want Congress to increase the amount that they and their families can borrow in federal student loans each year to pay for college expenses.
  
• 84 percent agree that if government has limited resources to fund student loans, it should offer greater financial assistance to current and future students, rather than offering greater financial assistance to individuals who already graduated from college.
  
• Students said that if they were unable to borrow enough money through the low-interest federal student loan program to cover their expenses, they would have to work more hours, take on higher interest debt or leave school.

“Students are clearly saying that federal student loans are critical to help them pay for college, ” said Victoria Sneed, vice president, KRC Research. “Students feel strongly that current loan limits are too low and that they should be increased. Rarely do we see such compelling data as are presented in this survey of college students.”

The Coalition for Better Student Loans, a unique coalition of financial aid administrators, parents, loan providers and organizations representing more than 2,000 colleges and universities, recently submitted proposals to Congress designed to increase access to higher education for more low- and middle income students. The Coalition’s five-part proposal is designed to lower the cost of borrowing when students get to college, ensure funding adequate to meet educational expenses while enrolled, and make it easier to repay loans when they graduate from college. KRC Research found that students agree with the Coalition’s goals.

Earlier this month, the Coalition sent a proposal to strengthen the federal student loan program to Congress, which is beginning debate on the reauthorization of the Higher Education Act. Members of the Coalition unanimously support increased grant aid. Recognizing, however, that increases in grant aid are not likely to be adequate to meet the financial needs of all students, the Coalition recommended providing relief from origination fees, increasing Stafford loan limits, offering more flexible repayment options, maintaining a viable loan consolidation program and extending loan forgiveness to borrowers in high-need occupations. To minimize unnecessary borrowing, the Coalition proposes giving schools flexibility to set lower loan limits for entire groups of students.

Currently, there is up to a 3 percent “origination fee” charged on any federal student loan. Last year, this fee cost students as much as $798 million that could otherwise be put toward their educational expenses. In addition, borrowing limits on federal student loans have not changed since 1992, and the lower limits imposed on loans to freshmen have been essentially unchanged since 1972. A freshman may borrow a maximum of $2,625 per year. According to the KRC Research survey of 400 college students (aged 18 to 25), students, on average, would support a maximum loan limit of over $8,900.

“As the campus staff who work most closely with students to help them understand and receive financial aid, we know that student loans are only part of the financial aid package students need to help pay for college, ” said Dallas Martin, president, National Association of Student Financial Aid Administrators. “Our proposal is a comprehensive set of student-friendly changes to the student loan program designed to address the full continuum of issues students face when they get to college and in repayment.”

“Paying for college is a major investment for families,” said Jim Boyle, president, College Parents of America. “Given a choice between below-market federal student loans and less favorable higher interest credit tools, it makes sense to use federal student loans. Students and parents understand that when students work too many hours or use credit cards to cover college costs it has negative long-term consequences for students.”

Students’ Views Mirror Those of General Public

The student poll released today mirrors the results of an earlier Coalition-sponsored survey of 800 likely voters. That study, conducted by Public Opinion Strategies and Hart Research showed that:

• 83 percent feel the federal student loan program is more important today than it was a few years ago.
  
• 88 percent say Congress should increase the current maximum Stafford loan limits so that students and their families can borrow more money to pay for college.
  
• 81 percent support offering greater financial assistance to current and future students, rather than to individuals who already graduated from college.

"Students today depend on federal student loans to make the dream of college a reality," said Sarah Jackson, board chair, Associated Students of the University of Missouri, which recently adopted a resolution supporting an increase in student loan limits. "The simple reality is that without the student-friendly proposals made by the Coalition, including higher loan limits, most students have no alternative but to work too many hours, take out higher-interest loans, run up their credit cards, or, in some cases – drop out of school. A college education should be accessible to any qualified student, and financial barriers should not be the reason a student does not attend our university. That is why students at the University of Missouri are urging Congress to adopt these proposals.”

Additional Student Survey Results

Other student survey findings include:

• 96 percent believe that federal student loans are a good investment in the future of America.
  
• If students needed a loan to finance their education and could not borrow enough from the low-interest federal student loan program to cover their expenses:
  
  • 64 percent would work additional hours while enrolled in school
    
  • 50 percent would take out a private or alternative student loan, personal line of credit, or a home equity loan
    
  • 47 percent would borrow money from parents, other family members, or friends
    
  • 39 percent would take time off from school to work and save money
    
  • 30 percent would have parents take out a private or alternative student loan, personal line of credit or a home equity loan
    
  • 26 percent would reduce the number of courses they were taking
    
  • 22 percent would use a credit card to cover additional college-related expenses

Fuller summaries of the legislative proposals and the surveys are available at www.betterstudentloans.org.

* * *

The Coalition for Better Student Loans is a group of financial aid administrators, parents, loan providers and organizations representing more than 2,000 colleges and universities which are working together to improve the federal student loan program and increase access to higher education for more students. The group is composed of the American Council on Education (ACE), Association of American Universities (AAU), College Parents of America (CPA), Consumer Bankers Association (CBA), Education Finance Council (EFC), National Association of Independent Colleges and Universities (NAICU), National Association of State Universities and Land-Grant Colleges (NASULGC), National Association of Student Financial Aid Administrators (NASFAA), National Council of Higher Education Loan Programs (NCHELP), and Sallie Mae. More information is available at www.betterstudentloans.org.

Contacts at member organizations:

ACE: Timothy McDonough (202) 939-9365
AAU: Barry Toiv (202) 408-7500
College Parents of America: Jim Boyle (703) 797-7103
CBA: Harrison Wadsworth: (202) 289-3903
EFC: Joanna Acocella: (202) 466-8621
NAICU: Tony Pals: (202) 739-0474
NASULGC: Richard Harpel: (202) 478-6040
NASFAA: Dallas Martin or Larry Zaglaniczny: (202) 785-0453
NCHELP: Karen Lanning: (202) 822-2106
Sallie Mae: Steve Heyman: (202) 969-8004

Financial Aid Administrator Contacts:

Catherine Breuer, Normandale Community College (South Bloomington, MN): (952) 487-8243
Youlonda Copeland-Morgan, Harvey Mudd College (Claremont, CA): (909) 621-8055
Karen Fooks, University of Florida: (352) 392-1271
Myron L. Hanson, The University of Montana: (406) 243-5504
David Myette, Champlain College (Burlington, VT): (802) 865-6430
Christine Zuzack, Indiana University of Pennsylvania: (724) 357-2218

Parent Contacts:

Bud & Mary Breheney (Newburgh, NY): (845) 565-0129
Ms. Pat Williams (Detroit, MI): (248) 642-7308
Ms. Bridget Czapiewski (Alexandria, VA): (703) 780-5987

Student Contacts:

J.P. Benedict, Student Body President, Associated Students of the University of Arizona: (520) 621-2782
Robin Cook, National Issues Director, Associated Students of the University of Missouri: (573) 882-2701 or (573) 268-2606
Jason Redd, elected student representative, Board of Governors, Rutgers University: (732) 991-2516

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