Not only are they draining Americans of bajillions of dollars every year, these scam artists have now taken the time to draft an email telling me why the federal Direct Lending Program will hurt people. They couldn't be more wrong - greedy bastards.
In Obama's budget cuts, he has proposed that the federal government issue all federal loans directly, rather than referring them to private lenders. I remember seeing Hillary stump about this, and nothing on her platform got me more excited than this idea. The loan companies want nothing to do with this, of course, as this would severely slash their profits.
The money that the government saves by not outsourcing these loans to private lenders will go directly to increase Pell Grants, which would allow SO many more students access to college. The email I received from Citi is below, and their reasoning seems to be nothing more than the typical capitalist argument of "let the markets decide." I feel like I become more of a left-wing nut everyday, I realize, but give me a break Citibank.
WaPo has a great article here to make sense of what Obama is doing.
May 7, 2009
Dear CHARLES LEIZEAR,
Thank you for the opportunity to help you obtain the education of your choice. As a student loan provider for the past 50 years, Citi has provided financial aid assistance to millions of students and parents nationwide.
Given the challenging economy and continued increases in the cost of higher education, it is critical that the U.S. student lending system serves the best interests of students and their families. If you believe that competition and choice among student loan providers is valuable, you have an opportunity to make your voice heard.
Why Get Involved?
The government budget outline proposes offering federal student loans solely through the federal government's Direct Lending Program starting July of next year. While this proposal will not impact a borrower's ability to obtain a federal student loan, it will eliminate your ability to choose a student loan provider. It will also substantially increase the national debt since each and every federally-insured student loan will be funded by the Federal Treasury through the issuance of treasury securities. This proposal impacts you as a citizen - both as a taxpayer and as a borrower.
Why Does Competition And Choice Matter?
Without private lender involvement through the Federal Family Education Loan Program, students and their families will not enjoy the benefits that competition has made possible for more than 40 years. This competition has provided not only a choice of lenders, but also innovative products and services, such as:
Competition also has driven increased customer satisfaction as a result of the responsiveness, personal attention and on-campus support that student loan lenders have provided to borrowers and schools nationwide.
- a variety of borrower benefits that lower your cost of borrowing
- financial literacy programs that educate you on how to borrow responsibly
- web-based tools and resources to advise you about your financing options
- default prevention services to help you pay back your loans
Make Your Voice Heard
If you value the ability to shop for, evaluate and choose your student loan provider, make your voice heard by contacting your Members of Congress and by signing one of the online petitions that support borrower choice and competition in federal student lending.
The Student Loan Corporation