The following letter was sent to Massachusetts Senator John Kerry and Congressman John Tierney.

September 8, 2009

The Honorable John Kerry
One Bowdoin Square
Tenth Floor
Boston, MA 02114

Dear Senator Kerry:

I write today on behalf of the Massachusetts Association of Student Financial Aid Administrators (MASFAA), an organization of more than 800 financial aid professionals employed in colleges and universities throughout the Commonwealth of Massachusetts.

As part of the Federal budget reconciliation process, the HELP committee of the US Senate is considering legislation to change the system and process of federally guaranteed student loans. This legislation will put at risk the individualized counseling student borrowers are currently receiving from FFELP providers.

MASFAA supports proposed amendments to HELP committee legislation that will ensure all student borrowers receive the highest quality service and support to assist them in repaying their obligations and avoiding student loan default.

MASFAA supports the following core principles that should be addressed in legislation drafted by the HELP committee:

• Opportunities for students to receive the highest quality financial literacy training and information while they are enrolled.
• Opportunities for borrowers in repayment to have comprehensive access to phone, on-line and in-person counseling on the broad array of terms of their loans; including opportunities for modified repayments, income based repayment and forbearance, so they can be informed and educated as they make decisions, and in order to avoid default.
• Incentives for servicing agencies to provide the most complete and highest quality service for students, vs. a model of the least expensive servicer contracting model.

Higher education in Massachusetts has a longstanding partnership with American Student Assistance (ASA), as well as with other non-profit guarantee agencies, to assist borrowers with information and to provide proactive tools to assist borrowers in remaining in good standing. As a guarantor under a Voluntary Flexible Agreement (VFA) with the Secretary of Education, ASA has an outstanding history of proactive loan counseling for borrowers that has increased repayments to the US Treasury and reduced defaults of student loans.

Counseling and proactive, positive, outreach are the keys to assisting young borrowers in successful debt repayment.

History shows that student borrowers are much less likely to experience the negative impacts of delinquency and default when they receive debt management training and support from their guarantors. American Student Assistance is an example of a guarantor that cares about the long-term success of student borrowers. Its financial Wellness education and outreach programs for borrowers give students a stable resource for all their loan repayment needs long after they leave campus, and should be considered a model for legislation of these services.

In this time of economic unrest, there can be no doubt about the immense value of debt management and financial literacy skills for every American. There’s never been a greater need for the highest quality education and debt management services.

I hope you will support legislation that includes the highest quality federally-funded support services for borrowers over the life of their student loans.

Sincerely,

Gail W. Holt, President
Massachusetts Association of Student Financial Aid Administrators (MASFAA)

Cc: Mr. Luke Swarthout, U.S. Senate Committee on Health, Education, Labor and Pensions and Mr. Arne Duncan, Secretary, U.S. Department of Education