In early September 2009, the Department began assigning FFEL Purchased Loans to the four new servicers on our federal loan servicing team — FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae. The Department will annually measure servicer performance in the areas of customer satisfaction and default prevention, and will then use these results to determine each servicer’s allocation of future loan volume. This announcement shares first quarter (October 2009 to December 2009) service performance results with the financial aid community.

“As they push to finish health-care legislation by the end of the month, Democratic leaders in Congress are weighing whether to add another of President Obama’s priorities to the package: a popular proposal to overhaul the federal student loan program,” the Washington Post reports. “But key senators are objecting to the move, arguing that political resistance in the Senate and the rapidly rising cost of the education measure could jeopardize efforts to push health-care reform to final passage.”

“President Obama is closer to winning a big fight with banks over who gets to dole out cheap student loans backed by the federal government,” CNNMoney.com reports. “In the next several weeks, legislation could pass forcing all government-backed student loans to come solely from the federal government. The move would cut out bank middlemen who now collect a subsidy to make federal student loans, such as Stafford loans, which offer the lowest interest rates because the federal government assumes the default risk.”

“Community college advocates are encouraging their constituents to put aside their minor disagreements about the structure of the American Graduation Initiative for the moment and lobby collectively for its quick passage, now that it may be considered alongside health-care reform via the contentious budget reconciliation process,” Inside Higher Ed reports. “While community college officials have strongly backed the legislation from the beginning, they also have had various ideas for improving it and have spent time — until now — arguing for various changes both publicly and in their behind-the-scenes communications with Congressional members and staff.”

“As legislatures face their toughest budget year since the recession began, the idea of giving a few universities autonomy to control their own finances has some appeal,” Stateline.org reports. “So-called privatization proposals have come up in every recession for the last 20 years, and a few states have loosened the reins on their top universities. The result is that a handful of the nation’s top-ranked state universities gradually have become more like private institutions — with less state support, more out-of-state students and tuitions that exceed the average price tag for private colleges, about $26,000 per year.”

“SB132 passed the House unanimously Tuesday, and now goes to the governor. The bill would require that high school students who are hoping to obtain the scholarship maintain a 3.5 grade point average,” the Salt Lake Tribune reports.

“On one hand, the president is telling all young people that they should complete at least a year of college, but on the other, the interest rates charged to students and parents in the DL program are well above current market rates,” writes Diane Auer Jones, president of Washington Campus, in the Chronicle of Higher Education. “The conversion to the DL program is yet another effort to collect money from one group (the students and parents who will pay the government very high interest rates in the DL program) to redistribute it to another (Pell recipients).”

“In response to the question Diane Auer Jones poses below about student loan reforms, my colleague Ben Miller (who has a frighteningly detailed understanding of the intricacies of federal loan policy) offers the following,” writes Kevin Carey, policy director for Education Sector, in the Chronicle of Higher Education. “Students are too young to have collateral and a history of credit, so it is a risk to lend to them. That’s why private market rates are higher than the ones determined by the government.”

“Sallie Mae extended the distance between itself and the rest of the field with a 47% surge in new guarantees which gives them a market share of 29%,” Student Lending Analytics reports. “The consolidation of the FFELP originators continued in FY09 with the top 10 now representing 76.8% of all new guarantees vs. 71.9% in FY08. The top 100 originators now constitute 98.1% of all new guarantees vs. 95.7% in FY08.”

One of the major benefits of student loan consolidation is that in most cases, it can lower your monthly payments and make repaying your loans much more affordable. In some cases, you can see reductions of up to half your monthly payment (estimated on the consolidation of $100,000 in federal loans.)
So, assuming you go out [...]