[Congressional Record Volume 140, Number 142 (Tuesday, October 4, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 4, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
         FEDERAL DIRECT STUDENT LOANS FOR CONGRESSIONAL RECORD

                                 ______


                          HON. WILLIAM D. FORD

                              of michigan

                    in the house of representatives

                        Tuesday, October 4, 1994

  Mr. FORD of Michigan. Mr. Speaker, history will regard the 103d 
Congress as having accomplished much during its tenure. One of its most 
notable achievements is the 1993 Student Loan Reform Act passed as part 
of the Omnibus Budget Reconciliation Act of 1993. The 1993 reforms, 
which were in fulfillment of President Clinton's promise to make 
college more affordable, are now being implemented by the Department of 
Education with great success. Students across the country are enjoying 
lower fees and looking forward to more flexible repayment options. 
These benefits are available to every student borrower attending an 
eligible higher education institution and should make a substantial 
contribution toward enabling our Nation's young people to invest in 
their own futures through postsecondary education--dollar-for-dollar, 
the greatest investment they can make.
  In addition to these new and substantial benefits that all borrowers 
now enjoy, students attending the 104 colleges, universities, and trade 
schools participating in the first year of the Federal Direct Student 
Loan Program are arriving at their financial aid offices to find that 
the long lines that typically wind down corridors no longer exist, that 
they know exactly when they will receive their checks, usually within a 
day or so, and that their loans are being processed with markedly less 
paperwork than ever before. $800 million in direct student loans will 
be issued in this academic year, and the reports coming in from the 
participating schools are nearly unanimous in their praise for the 
program.
  By eliminating the multiple layers of bureaucracy from the process, 
the Congress has enabled student financial aid administrators to focus 
on students and students to focus on their education. Parents are 
finding it simpler and more reliable, and, because the process of 
turning around an application is now only a matter of a couple of days, 
students have had less need for short-term loans. The Direct Student 
Loan Program is proving itself to be better for parents and for 
students, reducing anxiety and allowing students to focus on their 
studies and academic careers.
  The Department of Education is to be commended for its dramatic 
success in instituting this challenging new program. Those who opposed 
the reforms based on the belief that the Department of Education could 
not manage such a complex new endeavor must find themselves pleasantly 
surprised by the widespread reports of the success of the Federal 
Direct Student Loan Program. Financial aid administrators across the 
country have found their workload reduced and their students better 
served. Many financial aid administrators have commented on the 
responsiveness of the Department, the reduction in paperwork, and the 
simplicity of the one-stop shopping approach to student loans.
  The success of this new program owes much to the Department of 
Education's Office of Postsecondary Education and their aggressive and 
innovative approach. The Office of Postsecondary Education has 
established an on-line ``Direct Loan Bulletin Board'' that provides 
regulatory updates, problem-solving, and idea sharing with other 
financial aid administrators. The bulletin board also provides 
financial aid professionals with a public forum area that allows them 
to ask and respond to questions of other program participants, share 
implementation tips, and post important program findings.
  The dedicated professionals at the Office of Postsecondary Education, 
led by Assistant Secretary David Longanecker and Deputy Assistant 
Secretary Leo Kornfeld, have worked hard to ensure that participating 
school's data control systems are compatible with the Department's and 
that school professionals are kept informed of all developments and 
have adequate training in the new software applications. All of this 
has eased the transition.
  The Office of Postsecondary Education is also using this new program 
as an opportunity to improve its internal systems, update procedures, 
and institute better oversight and management of the financial aid 
delivery system. Over the next couple of years, we will see continued 
improvements in data management and an overall streamlining of the 
delivery of Federal financial aid packages.
  The Department of Education is not completing its selection of 
schools for year two of the Federal Direct Student Loan program. By 
this time next year, 40 percent of new student loan volume, $5.3 
billion, will be through the Federal Direct Loan Program. The initial 
success of the program bodes well for next year and for the over 1,300 
schools expected to participate. The continued success of this program 
will assure not only continued savings to students and taxpayers, 
increased simplicity for school administrators, and greater 
accountability for an important Government program, but will help to 
restore the American public's faith in the ability of the Federal 
Government to carry out its responsibilities and fulfill the promise of 
its mission.

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