Letter Regarding Federal Student Loans

May 2, 2002

Dear Senators and Representatives:

We were pleased to see that interest rates for consolidated student loans are expected to fall to around 4 percent in July. For millions of borrowers, this will be an excellent opportunity to consolidate their loans at a low fixed interest rate.

We are dismayed to learn that some student loan companies, concerned about the loss of loan assets with significantly higher borrower rates, have been lobbying Congress and the Administration in favor of legislation that would change current law by artificially increasing interest rates for consolidation loans. This unconscionable position, driven solely by a concern about profits, would be a giant step backwards for our nation's students and families.

As you continue to consider federal student loan policy we urge you to continue to do the right thing for students. It is our belief that federal policy should focus on making college as affordable as possible for our nation's students and we strongly oppose any moves to increase loan rates or fees. Policy makers would be well advised to reexamine lucrative federal subsidies for the loan industry that are embedded in the legislative design of student loan programs.

Thank you for your attention to this matter.

Kind regards,

Jerome H. Sullivan
Executive Director
American Association of Collegiate Registrars and Admissions Officers