March 15, 2005: Headlines: COS - Somalia: Politics: Congress: Student Loans: CCAGW : CCAGW Criticizes Thomas Petri's Effort to Save Student Loan Program

Peace Corps Online: Directory: Somalia: Special Report: Tom Petri: Tom Petri: Archived Stories: March 16, 2005: Headlines: COS - Somalia: Politics: Congress: Student Loans: Fond du Lac Reporter: Thomas Petri's Student Aid Reward Act of 2005 calls for using $17 billion in savings from an expansion of the federal direct student loan program to increase Pell grants at colleges that participate in the program : March 15, 2005: Headlines: COS - Somalia: Politics: Congress: Student Loans: CCAGW : CCAGW Criticizes Thomas Petri's Effort to Save Student Loan Program

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CCAGW Criticizes Thomas Petri's Effort to Save Student Loan Program

CCAGW Criticizes Thomas Petri's Effort to Save Student Loan Program

CCAGW Criticizes Thomas Petri's Effort to Save Student Loan Program

CCAGW Criticizes Effort to Save Student Loan Program

WASHINGTON, March 15 /PRNewswire/ -- The Council for Citizens Against Government Waste (CCAGW) today criticized Senators Ted Kennedy (D-Mass.) and Gordon Smith (R-Ore.) and Representatives Thomas Petri (R-Wis.) and George Miller (D-Calif.) for reintroducing the Student Aid Reward Act, which will use taxpayer dollars to stimulate the growth of the money-leaking Federal Direct Loan Program (FDLP). A March 2004 report from the Government Accountability Office (GAO) raised questions on whether FDLP was saving money. The report found that in fiscal years 1995-2003, total cash outflows for FDLP exceeded total cash inflows by $10.7 billion.


WASHINGTON, March 15 /PRNewswire/ -- The Council for Citizens Against Government Waste (CCAGW) today criticized Senators Ted Kennedy (D-Mass.) and Gordon Smith (R-Ore.) and Representatives Thomas Petri (R-Wis.) and George Miller (D-Calif.) for reintroducing the Student Aid Reward Act, which will use taxpayer dollars to stimulate the growth of the money-leaking Federal Direct Loan Program (FDLP). A March 2004 report from the Government Accountability Office (GAO) raised questions on whether FDLP was saving money. The report found that in fiscal years 1995-2003, total cash outflows for FDLP exceeded total cash inflows by $10.7 billion.

"With a straight face, these members of Congress tell us that we should use tax dollars to bribe colleges and universities away from more efficient private source loans to the failing direct loan program, all in the name of ísaving money,í" CCAGW President Tom Schatz said.

According to a GAO report released in November 2003, the FDLP share of total new loan volume steadily decreased from its peak of 34 percent to 28 percent. Many colleges and students flocked to the privately-run Federal Family Education Loan Program (FFELP) for its more attractive terms to borrowers.

The direct loan program, first implemented in 1993 with the promise to save tax dollars by cutting out the "middle man" of commercial banks, is similar to the private FFELP, but differs in a fundamental way. FFELP uses private sources such as banks or other lenders to provide federally guaranteed student loans. Private lenders issue, service, and are paid back the loans. In contrast, FDLP loans are taken directly from the U.S. Treasury, and recipients pay the money back to the federal government. FDLP is losing money because origination fees and receipts from borrowers are less than the amount of interest the Department of Education (DoED) pays on the money it borrows from the Treasury.

In 1999, the DoED inspector general estimated it cost the government $17 per loan to manage the FDLP while it would have cost private lenders $13 per loan to manage the same program. In fiscal 2005, the DoED will provide nearly $84 billion in student aid grants and loans to 10 million students and parents. Considering the large percentage of loans still outstanding, the FDLP is digging itself into a deeper financial hole. Senator Kennedy claims that the savings in his legislation will be used to increase Pell Grants, costing taxpayers nothing.

"We have heard this siren song before," Schatz concluded. "Whenever Senator Kennedy talks about a government program that will save tax dollars, taxpayers should hang onto their wallets. Congress needs to wake up to the real costs of direct lending instead of expanding a program that continues to waste tax dollars it was purportedly designed to save."

CAGW will issue a report this spring on why the direct loan program has not delivered on its promised savings.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nationís largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

CONTACT: Tom Finnigan or Lauren Cook of the Council for Citizens Against
Government Waste, +1-202-467-5300

Web site: http://www.cagw.org/





When this story was posted in March 2005, this was on the front page of PCOL:

The Peace Corps Library Date: February 7 2005 No: 438 The Peace Corps Library
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RPCVs in Congress ask colleagues to support PC Date: March 5 2005 No: 482 RPCVs in Congress ask colleagues to support PC
RPCVs Sam Farr, Chris Shays, Thomas Petri, James Walsh, and Mike Honda have asked their colleagues in Congress to add their names to a letter they have written to the House Foreign Operations Subcommittee, asking for full funding of $345 M for the Peace Corps in 2006. As a follow-on to Peace Corps week, please read the letter and call your Representative in Congress and ask him or her to add their name to the letter.

Add your info now to the RPCV Directory Date: March 13 2005 No: 489 Add your info now to the RPCV Directory
Call Harris Publishing at 800-414-4608 right away to add your name or make changes to your listing in the newest edition of the NPCA's Directory of Peace Corps Volunteers and Former Staff. Then read our story on how you can get access to the book after it is published. The deadline for inclusion is May 16 so call now.

March 12, 2005: This Week's Top Stories Date: March 13 2005 No: 487 March 12, 2005: This Week's Top Stories
The Coyne Column: Read Winning Essay by PCV 12 Mar
Laura Germino helps Migrant Workers Advocacy Group 12 Mar
Sam Farr impresses medical-pot advocacy group 11 Mar
Fred O'Regan writes Op-Ed on Canada seal hunt 11 Mar
Fern Holland remembered In Oklahoma 10 Mar
Mountaineer Charles Houston receives honorary degree 10 Mar
Elaine Chao led delegation for President's inauguration 10 Mar
Chris Dodd wins Hispanic Capital Award 9 Mar
Pat Waak is new Colorado Democratic Party Chair 9 Mar
Chris Matthews withdraws from Florida Event 9 Mar
Timothy J. O'Brien returns to Korea 8 Mar
Tomas Belsky's paintings inspired by service in Brazil 7 Mar
Christopher Hill to be Assistant Secretary of State 7 Mar
Allen Moore is Sen Frist's Deputy Chief of Staff 7 Mar
Jim Doyle heads trade delegation to Mexico 5 Mar
Al Kamen says Narcissus Is Now Greek AND Roman 4 Mar
Diana Gomez says to do something about Peace 4 Mar

March 12, 2005: RPCV Groups in the News Date: March 14 2005 No: 494 March 12, 2005: RPCV Groups in the News
San Diego RPCVs host reception with Gaddi Vasquez on March 6 4 Mar
Alaska RPCVs speak for dividend 4 Mar
Western North Carolina's RPCVs sponsor Africa Night on March 6 3 Mar
Maryland RPCVs lobby their Senators for Peace Corps 3 Mar
Connecticut RPCVs hold fundraiser on March 5 3 Mar
Charles Baquet speaks at Louisiana PC Breakfast on March 4 28 Feb

RPCVs: Post your stories or press releases here for inclusion next week.

March 1: National Day of Action Date: February 28 2005 No: 471 March 1: National Day of Action
Tuesday, March 1, is the NPCA's National Day of Action. Please call your Senators and ask them to support the President's proposed $27 Million budget increase for the Peace Corps for FY2006 and ask them to oppose the elimination of Perkins loans that benefit Peace Corps volunteers from low-income backgrounds. Follow this link for step-by-step information on how to make your calls. Then take our poll and leave feedback on how the calls went.
Make a call for the Peace Corps Date: February 19 2005 No: 453 Make a call for the Peace Corps
PCOL is a strong supporter of the NPCA's National Day of Action and encourages every RPCV to spend ten minutes on Tuesday, March 1 making a call to your Representatives and ask them to support President Bush's budget proposal of $345 Million to expand the Peace Corps. Take our Poll: Click here to take our poll. We'll send out a reminder and have more details early next week.
Peace Corps Calendar: Tempest in a Teapot? Date: February 17 2005 No: 445 Peace Corps Calendar: Tempest in a Teapot?
Bulgarian writer Ognyan Georgiev has written a story which has made the front page of the newspaper "Telegraf" criticizing the photo selection for his country in the 2005 "Peace Corps Calendar" published by RPCVs of Madison, Wisconsin. RPCV Betsy Sergeant Snow, who submitted the photograph for the calendar, has published her reply. Read the stories and leave your comments.
WWII participants became RPCVs Date: February 13 2005 No: 442 WWII participants became RPCVs
Read about two RPCVs who participated in World War II in very different ways long before there was a Peace Corps. Retired Rear Adm. Francis J. Thomas (RPCV Fiji), a decorated hero of the Japanese attack on Pearl Harbor, died Friday, Jan. 21, 2005 at 100. Mary Smeltzer (RPCV Botswana), 89, followed her Japanese students into WWII internment camps. We honor both RPCVs for their service.
Bush's FY06 Budget for the Peace Corps Date: February 7 2005 No: 436 Bush's FY06 Budget for the Peace Corps
The White House is proposing $345 Million for the Peace Corps for FY06 - a $27.7 Million (8.7%) increase that would allow at least two new posts and maintain the existing number of volunteers at approximately 7,700. Bush's 2002 proposal to double the Peace Corps to 14,000 volunteers appears to have been forgotten. The proposed budget still needs to be approved by Congress.

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Story Source: CCAGW

This story has been posted in the following forums: : Headlines; COS - Somalia; Politics; Congress; Student Loans

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