On September 17th the House of Representatives passed HR 3221, the Student Aid and Fiscal Responsibility Act of 2009, a massive student aid bill which passed out of committee in late July by a vote of 30-17. The bill makes an historic investment in student aid, which should help reduce student debt -  investments that are paid for by cutting excessive lender subsidies from within the loan programs. 

Most students are eligible for federal Stafford loans to help pay for college. The college supplies the loans through one of two ways:

 - Through the Federal Family Education Loan (FFEL) or,
 - The Direct Loan (DL) program. 

In FFEL, banks and lenders are subsidized to originate and deliver the loans whereas the DL program relies on federal Treasury dollars to do the same.

The recent turmoil in the credit markets meant that the federal government had to create another program to back banks and lenders in the event that they could not fulfill their student lending obligations.
 
The Student Aid and Fiscal Responsibility Act moves all federal student lending into the Direct Loan program, which would allow the federal government to use its education dollars more efficiently.  The legislation strengthens the federal student loan program by ensuring that all borrowers have access to affordable loans, regardless of market conditions.
 
Banks and lenders are lobbying heavily to defeat this bill and with your support we can match and overturn their efforts.