SOURCE: American Student Loan Services

July 11, 2007 10:30 ET

House Bill Set to Pass This Week Will Increase Cost for Students and Create Virtual Monopoly

Legislation to Be Voted on This Week by the House of Representatives Will Raise Costs for Students, Punish Small Businesses and Eliminate Competition

WASHINGTON, DC--(Marketwire - July 11, 2007) - On the heels of comments by officials from the U.S. Department of Education that approximately 70 percent of student loans were provided by one lender at as many as 800 colleges in the last year, the House of Representatives will consider legislation this week that further eliminates competition and raises costs for students.

As the House considers H.R. 2669, the so-called "College Cost Reduction Act," American Student Loan Services President and CEO Brian Skowronski noted the legislation is a short-sighted attempt for headlines that will drive costs up for students and their families and force many small businesses out of the market.

"No one is against lowering costs for students. This legislation, however, will do the exact opposite. By driving small businesses out of the market, students will have less choice, less customer service and end up paying more for their loans in the long run. Let's not infringe on the ability of competition to help students just as competition begins."

The legislation, which will enact steep student loan program cuts on the backs of small business owners, will hinder competition in the industry and halt the innovation and competition that have resulted in increased customer services and lower costs for students.

"By cutting billions from the student loan program, the Congress is doing a great disservice to students and their families. I am dismayed that members of Congress have failed to include small businesses in their discussion on how to improve the student loan industry and reduce costs for students. If they had, they would have realized that eliminating competition is moving the country in the wrong direction," said Skowronski.

While Skowronski applauded efforts to crack down on the abuses of preferred lenders lists in the industry, he noted that gutting competition leaving the student loan market a virtual monopoly is not the answer.

"Small business loan providers created more than 50 percent of the $85 billion in student loan consolidation in 2006. In fact, small businesses gave 1.5 million students the opportunity to save as much as $10,000 each. These are most certainly savings that the government's Direct Loan program can't come close to duplicating."

American Student Loan Services is a privately held student loan consolidation and lending institution. Headquartered in Phoenix, Arizona, ASLS has established a core focus on providing college students with all the necessary tools to fund their college education. For more information on ASLS, please visit www.americanstudentloan.com.

Contact Information

  • Contacts:
    Angelo Terrana
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    Michelle Brenan
    202-974-5084