2008 CASFAA EXECUTIVE COUNCIL



[pic]2008 CASFAA EXECUTIVE COUNCIL

President

Louise Jones

UC Riverside

1156 Hinderaker Hall

Riverside, CA 92521

President-Elect

Barbara Bickett

Western Career College

27401 Los Altos #400

Mission Viejo, CA 92677

Past-President

Mindy Bergeron

John F. Kennedy University

100 Ellinwood Way

Pleasant Hill, CA 94523

Vice-President-Federal Issues

Dr. Patricia Hurley

Glendale Community College

1500 N. Verdugo Road

Glendale, CA 91208

Vice-President-State Issues

Noelia Gonzalez

CSU, Northridge

18111 Nordhoff Street

Northridge, CA 91330

818.677.5999

Treasurer

Tom Ma

UC, Irvine

102 Aldrich Hall

Irvine, CA 92697

Treasurer-Elect

Nicholas Valdivia, UCLA

405 Hilgard Ave; Box 951435

Los Angeles, CA 90095

Secretary

Tanya M. Grigg

Samuel Merritt College

450 30th Street, Suite 2850

Oakland, CA 94609

Member-at-Large

Graduate and Professional

Charles Conn

UC Berkeley, Haas School of Business

420L Student Services Bldg.#1900

Berkeley, CA 94720-1900

Member-at-Large

Ethnic Diversity

Dewayne Barnes

Stanford Law School

559 Nathan Abbott Way

Stanford, CA 94305

CSU Representative

Michael Dear

Sacramento State University

6000 J Street

Sacramento, CA 95819

Community College Representative

JoAnn Bernard

Mira Costa College

1 Barnard Drive, FAO MS#3ª

Oceanside, CA 91711

Independent Representative

Yvonne Gutierrez-Sandoval

Pitzer College

1050 N. Mills Avenue

Claremont, CA 91711

Proprietary Representative

Valerie Edwards-Bendy

Heald College

1605 E. March Lane

Stockton, CA 95219

UC Representative

Heather Nardello

UC Merced

5200 N. Lake Road

Merced, CA 95343

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CALIFORNIA ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS

May 15, 2008

The Honorable George Miller

United States House of Representatives

Washington, D.C. 20510

Dear Congressman Miller:

RE: Reinstatement of Lender and Guaranty Agency Ability to Provide In-Person Loan Counseling HEA Amendments – HR 4137: Part E, 155(b)(3)(B) (iv)

The California Association of Student Financial Aid Administrators, representing over 1600 financial aid administrators employed at over 600 institutions of higher education in the State of California, are writing to request clarification and strengthening of the lender in-person loan counseling provision in HR 4137.

This is among the many provisions currently being discussed by the Conference Committee and staff reviewing recently passed Amendments to the Higher Education Act. The current House HEA proposals exempt in-person counseling in the definition of banned gifts in the section referenced above but it is not clearly stated as an eligible activity in other parts of the bill. However, other language, such as, the ban on activities not provided by the Secretary under the Direct Loan program, are more strongly stated and could be interpreted as over-riding the gift exemption definition. We are concerned that legal interpretations could provide the basis for regulations that would continue to ban in-person counseling by lenders and guaranty agencies.

We request that the following language from 155(b)(3)(B)(iv) be also added to Sec. 157(c) Institutional Counseling and suggest the following:

(3) An institution may enlist the services of a lender or guaranty agency to assist in the delivery of required student loan entrance and exit counseling provided that (I) the institution’s staff are in control of the counseling (whether in person or via electronic means) and (II) such counseling does not promote the products or services of any lender.

We are requesting this additional language because students are best served when schools can take advantage of the expertise of lenders and guaranty agencies in providing information to borrowers. Increasing loan volumes, state demographic changes and the increasing complexity of the FFELP program require the efforts of both the institutions and the lenders and guaranty agencies in order to provide the best and most complete information possible to student borrowers.

According to the California Postsecondary Education Commission, California colleges and postsecondary institutions enroll approximately 2.4 million students, about twice as many as New York, the state with the next largest enrollment. Over the past 10 years, the number of loans guaranteed for students attending California post-secondary institutions has increased from about 300,000 to 1.2 million.

During that same period, the average student indebtedness for all California students increased from $11,000 to about $18,000. Loan counseling has become a much larger function for financial aid offices. Many colleges want to make sure that students understand their loan obligations and require students to complete a loan counseling session every year they borrow rather than just when they begin and end their program. This approach has worked very well with some populations. Although there are many web-based loan counseling products available, this method assumes a fairly motivated and sophisticated user and does not adequately serve student populations, such as, ESL students, many first generation students or students who just need to ask questions in order to understand the information. Several organizations (New England Resource Center for Higher Education, TERI, The Tomas Rivera Institute, TICAS) have conducted studies on the need for better delivery of financial aid information to low-income, first-generation students. In-person counseling is more effective for many students than on-line programs.

Given the increasing complexity of the student loan programs and the increasing loan levels, loan counseling is more important than ever. Lenders and guaranty agencies are best equipped to provide current and accurate information on loan provisions, projected interest rates, deferment and forgiveness provisions and borrower benefits. We strongly feel that in-person loan counseling by lenders and guaranty agencies is an essential benefit for students.

If there is concern over possible conflict of interest and inappropriate marketing, we suggest that guaranty agencies be allowed to do the entrance counseling and lenders be allowed to do exit counseling. Guaranty agencies do not originate loans, are not selected by a student and are equipped to talk about loans in a general way and how the borrower benefit may differ from lender to lender. By allowing lenders to do exit interviews, students are given an opportunity to talk directly to their own lender and get the best information about their responsibilities, projected interest rate and benefits. Since the student has already selected his or her lender at this point, marketing and conflict of interest concerns become moot.

Thank you for your consideration of our request on behalf of the students of California. Please contact us if you need additional information.

Sincerely,

Louise Jones

CASFAA President

Cc: Senator Diane Feinstein

Congressman George Miller

Congressman Buck McKeon

Congresswoman Lynn Woolsey

Congresswoman Linda Sanchez

Congresswoman Susan Davis

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