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As health care remains a hot topic student loan legislation slipping by almost unnoticed at the reorganization of college aid added to the health care bill affects millions of students.
Parents private lenders and maybe jobs in America.
Joining us now from Washington DC is -- -- he's the vice chairman.
And chief financial officer of celibate Jack welcome to Fox Business I got imagine Sally may not happy about these changes.
Well thank you Brian good to be here now we're obviously not it's it's disappointing to us to see.
This important legislation which impacts the largest source of federal financial aid for students and families.
To be basically buried by health care to.
-- health care debate.
And it didn't need to be this way we there was a proposal on the table that would have saved 83 billion dollars we believe it wouldn't deliver better services to students.
Through better service levels and better to fall prevention and all of that got lost in the shuffle.
Are you more frustrated by the fact of the changes taking place or that they were.
Sort of pushed into a health care bill and pretty much ignored from debate.
Well a little bit of both the main part of it is is we we Sallie Mae were very much with the president and asking board supporting student loan reform.
We just thought it should be done -- could be done in a better way.
That better way was preserving competition so that students and schools.
Could count on the competitive nature of the economy to drive better services and efficiency.
And better default prevention.
Today at -- made through our efforts we prevent tens of thousands of students from avoiding default unnecessarily and and that's a process that gets -- And unfortunately this debate you know it has had little there's been little debate on the hill on this topic at all in in the senate they have and actually held a single hearing.
On this subject and yet it's looks as if it's going to be included in past.
-- without any debate and that that that's a sad.
Statement for I think the economy for students and families of Sally -- get -- the lay people off.
Yes the other big aspect of this is that tens of thousands of jobs are likely to be lost throughout the throughout the nation are about 35000 people working in the student loan industry nationwide.
At Sallie -- alone we estimate that will lose about 2500 jobs that this legislation -- to prevail.
And again it it didn't need to be this way -- these jobs could have been preserved in a valuable services that these employees provide.
How many -- -- do you have -- -- Jack.
We have 8500 employees today say so you're talking about 030% of your staff is gonna have to be fired because this bill.
That's right unnecessarily.
Anyway prevent that.
Well we as I said there was an alternative proposal on the table and and that proposal.
Not only saved 83 billion dollars has scored by CBO.
It would have preserved competition in the space it would have preserved the default -- services.
In it would preserve these jobs and all of that could have been done.
In a bipartisan fashion.
There's really no reason for this bill to have been attached.
And made worse I think is is this bill also steals and -- nine billion dollars from interest payments that students will make on their loans to help fund health care.
That's a piece that could have easily funded and -- million and a half.
Students with pell grants over the next ten years.
That money's going to be gone in order to pay for the health care program what happens -- the loans that are currently in the system and being serviced by private lenders.
Do they -- work themselves out and then sort of just die as they're paid off or there are at an immediate change.
Now that's existing loans loans that are outstanding will continue to be.
Governed by the old rules and so those borrowers will continue to make payments to their various lenders.
Through the normal process no changes there.
This impacts this bill impacts only new loans and impacts them in a very short time frame and it goes into effect July 1 2010.
And this means thousands of schools are going to have to rush to convert their systems to be ready -- and frankly we don't expect that that will be -- successful transition.
Be tough for the job market Jack -- -- of assignment Jack thank you very much for coming on the program.
Thank you very well senator Dodd looking.
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