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Gilbert Cruz' wrote the following in his TIME article entitled "Obama's Student-Loan Plan: A 'Good' Takeover?" on Wednesday, September 16, 2009:

"Educational institutions currently have two ways to offer federal loans to students. In the Federal Family Education Loan (FFEL, pronounced "fell") program, the government pays subsidies to banks and lenders to dole out money to borrowers and reimburses companies up to 97% of the cost of any loan that is not paid back. The second way is the direct-loan program, created in 1993 as an alternate option, in which the government cuts out the middle man, lends money directly and gets all the profits. If the Student Aid and Fiscal Responsibility Act (SAFRA) passes both houses of Congress, the approximately 4,500 colleges and universities that are currently signed up for FFEL will have to abandon the program and start using the direct-loan option by July 1, 2010."

http://www.time.com/time/politics/article/0,8599,1924128,00.html?iid=tsmodule&imw=Y

Earliest, on August 10, 2009, Neal McCluskey (associate director of the Cato Institute's Center for Educational Freedom and author of Feds in the Classroom: How Big Government Corrupts, Cripples, and Compromises American Education) wrote this in his article "SAFRA Stinks" (at Forbes.com):

"Something called the Student Aid and Fiscal Responsibility Act (SAFRA) zipped through the House Committee on Education and Labor recently. Odds are you haven't heard much about it, maybe because of the deafening health care clamor, but it would do something pretty big, ending the 44-year-old Federal Family Education Loan (FFEL) program--which uses federal bucks to back tens of billions of dollars of student loans from private lenders--and replacing it with lending straight from Uncle Sam. In other words, it would destroy what little chance there was of student loans being constrained at all by economic realities."

http://www.forbes.com/2009/08/10/education-loans-tuition-financial-aid-opinions-colleges-safra.html

Draw your own conclusions, but SAFRA doesn't sound like a fundamental expansion of capitalism and free enterprise to me.

- Ed Smith, Publisher
The EHS Letter Manual