SOURCE: American Student Loans

May 23, 2007 10:14 ET

Memo to Congress: Less Competition Leads to Higher Costs for Students

Greater Scrutiny of Preferred Lenders List, More Choices Will Serve Students Best

WASHINGTON, DC -- (MARKET WIRE) -- May 23, 2007 -- A leading small business lender today called on the U.S. Congress not to eliminate the one factor that has led to the greatest savings for students in recent history -- Competition. American Student Loan Services founder and President Brian Skowronski noted that any legislation considered by the Congress should include both greater regulation of how preferred lenders lists operate and a reinforcement of competition in the industry.

"As the Congress continues to debate how to make college more affordable for students and families, a rare opportunity exists to work together to ensure that we achieve that goal," said Mr. Skowronski. "We can work to reach common ground regarding more scrutiny and transparency of preferred lenders lists. There is no doubt that some of the current practices work against students and we should all be in the business of helping students save money."

Mr. Skowronski added that the Congress would also be working against the interests of students if they eliminated the savings that have been generated by competition. "The Congress would be doing a great disservice to students if they eliminate competition and free enterprise in the industry. I am hopeful that members of Congress will include small business lenders in their continuing dialogue so they can learn how competition helps students."

Despite the savings generated for students by small businesses, Skowronski noted that several proposals being discussed by members of Congress would force small businesses to close and leave students with less choice and higher costs. "It is unconscionable to charge small businesses prohibitively high fees as some are now proposing. It will force most small businesses to close their doors, and therefore force millions of students to pay thousands of dollars more for their already expensive college costs."

Skowronski also echoed many students' concerns that the proposals currently being debated in Congress have totally ignored one important fact -- since small businesses have been allowed to compete for student loans they have generated greater savings for students than any proposal currently being debated.

"Small business lenders created more than 50% of the 85 billion in student loan consolidation in 2006. In fact, small business lenders gave 1.5 million students the opportunity to save billions of dollars -- nearly $10,000 each. These are most certainly savings that the government's Direct Loan program can't come close to duplicating. Let's not infringe on the ability of competition to help students just as competition begins."

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.