Knoxville, TN: Edamerica, the nation's seventh largest student loan provider, today issued the following statement in response to the President's remarks during Friday's press conference:

As the debate continues over whether or not to nationalize the student loan industry, Edamerica is steadfast in its support of service, access and choice for students and schools. While we commend the President's desire to make higher education affordable for Pell-eligible families, eliminating the Federal Family Education Loan Program and diverting hypothetical savings to yet another entitlement program is not the best way to accomplish this goal. In fact, the students paying federally mandated above-market interest rates will be incurring debt to subsidize their classmates, not their lenders. It's a classic redistribution of wealth scenario that undermines the very fabric of this country.

Referring to the figures provided by the Congressional Budget Office, Senator Lamar Alexander said, "The cost savings that is alleged is ... a trick on students to make congressmen look good. What we are going to do if we do not preserve choice is saying to all the students who get a loan that we are going to take money from them and then give it to other students so that congressmen can go home and brag that [they have] increased the amount of the Pell grants."

President Obama's blueprint for a federal takeover of the college-loan industry will create a new entitlement that will cost taxpayers billions and will never go away. The plan will eliminate tens of thousands of private-sector jobs and create a vacuum of experience and expertise at the heart of an effective program that has been endorsed by over 75 percent of higher education institutions nationwide. Furthermore, nothing in the President's proposal lowers interest rates for students, under either program. Today's students are struggling during this difficult economic climate.

Why not lower the interest rates currently charged on student loans? For example, if a student paid a market rate of 4 percent versus the mandatory government rate of 6.8 percent on a $20,000 Stafford loan, the savings would be $5,600 over ten years - or $84 billion for 15 million students over the same period.

"We, at Edamerica, want to put the student back in student loans," said Tony Hollin, Chairman and CEO. "Let's not create another nationalized entity that does nothing to lower the cost of financing education for students and families."

Edamerica is a top-ten student loan provider and has helped over a million students and families realize their dreams of higher education by offering low-cost postsecondary student loans nationwide. Edamerica is an Edfinancial Services lender. Edfinancial Services is a private corporation headquartered in Knoxville, TN with satellite servicing centers in Little Rock, AR and Jacksonville, FL. Servicing student loans nationwide, Edfinancial Services administers student loan volume in excess of $10 billion.

Posted 04/28/09 to www.NASFAA.org. Posting of press releases is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.