Cal State Long Beach President F. King Alexander, who recently won the California State Student Association’s President of the Year award, was part of a recent Cal State University systemwide effort to pass a bill that will end decades of federally guaranteed student loans.
Alongside an overhaul of health care, U.S. Congress passed the Student Aid and Fiscal Responsibility Act (SAFRA), which will allow students to apply for loans through the government’s Direct Lending Program.
Last month, national legislatures eliminated the Federal Family Education Loan program (FFELD). Under the new law, private lenders will not receive federal subsidies for loans they make to American students. Likewise, the bill will no longer guarantee loans made to students by private lenders.
“Now we can go to Washington and advocate for changes in student aid that help our students without having to worry about where the banking lobby sits and how they’re going to benefit,” Alexander said. “This was a major victory for students. [The CSU] is very much engaged in these battles.”
According to Alexander, last year 11 Cal State Universities were strictly on the Direct Lending Program. CSULB went to Direct Lending last summer, and this year the CSU has 21 of its 23 universities using the program.
Established as part of the Higher Education Act of 1965, FFELD reimbursed banks for defaulted loans using taxpayer money. SAFRA eliminates this practice, allowing the government to directly lend to students and profit from it.
According to the Congressional Budget Office, the bill will save taxpayers $61 billion dollars over nine years.
“We were gunning for $87 billion over the next nine years,” Alexander said.
A bulk of these savings will go to bolstering Pell grants. Over 10 years, $36 billion will be used to bolster annual Pell grants. Individual scholarships will increase to $5,500 in 2010 and $5,795 by 2017. The scholarship program will also be linked to the Consumer Price Index in 2013, matching cost of living increases.
SAFRA will also invest $2.55 billion in historically black colleges and minority-serving institutions.
“We will be able to tap in to some grant support,” Alexander said regarding the $2.55 billion investment.
SAFRA was passed through Congress by way of budget reconciliation. Democrats in the Senate packaged the bill with the health care overhaul, passing the Health Care and Education Reconciliation Act of 2010 in late March.
“It’s rumored that without getting the support from [SAFRA] neither one of [the bills] would have passed,” said President Alexander.
The California State Student Association annually awards a president “who has assisted the CSSA in advancing its statewide policy agenda,” according to its website.
“I’m just fortunate that they noticed and recognized the work that we were getting accomplished in Washington and how very important it has been to our students,” Alexander said.
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