From the SRCC: Student loan mess

When the government supplants private industry, wreckage follows.

From the Senate Republican Communications Center:

Student Loan Mess

‘Thousands Of Workers’ Lost Their Jobs When President Obama Took Over The Student Loan Industry Last Year

‘Lenders… Have Laid Off Thousands Of Workers’

“A year after President Obama signed a law eliminating bank-based student lending, the lenders and guarantors that formed the backbone of the old system have laid off thousands of workers, eliminated programs...” (“A Year After Bank-Based Lending's Demise, A Shrunken Industry Redefines Itself,” The Chronicle Of Higher Education, 3/29/11)

NATIONAL IMPACT: “A new law that cuts banks out of the federal student loan business is costing 2,500 workers at Sallie Mae their jobs. The nation's largest student lender has told 1,200 staffers in service centers in Killeen, Texas, and Panama City, Fla., they will lose their jobs by year-end. The remaining cuts will follow in 2011, resulting in nearly a third of the company's total work force of 8,000 losing their jobs.” (“2,500 Sallie Mae Jobs Fall To New Student Loan Law,” AP, 4/22/10)

FLORIDA: “The Sallie Mae office in Lynn Haven, which once was a second home to 700 local workers, will close Friday, Sallie Mae officials confirmed Wednesday night. … Although the doors will shut Friday, the real end for the plant came July 1 when private lenders such as Sallie Mae were forbidden from originating federally guaranteed student loans, officials said. The change was tucked into the health care overhaul signed by President Barack Obama earlier this year.” (“Sallie Mae Office To Close Friday,” The News Herald [FL], 11/11/10)

MASSACHUSETTS: “American Student Assistance, which guaranteed loans in Massachusetts and the District of Columbia, has laid off about 75 staff members as a result of the changes, says its chief operating officer, Michael Finn. But despite the reduction in funds, he says the company will shift its focus toward loan counseling.” (“A Year After Bank-Based Lending's Demise, A Shrunken Industry Redefines Itself,” The Chronicle Of Higher Education, 3/29/11)

TEXAS: “Aegis Ltd., a global business outsource company based in Irving, confirmed Thursday that it’s laying off 130 workers at its call center in Killeen… A call center employee said the workers affected by the layoff are those who service the Salle Mae client group.” (“Central Texas Call Center Announces Layoffs,” KWTX News, 1/13/11)

SOUTH DAKOTA: “In January 2011, Wells Fargo also announced to trim 120 workers in its student loan operations, including many in Sioux Falls...” (“Goldman To Reduce Cost By Layoffs,” Zacks Equity Research, 1/28/11)

PENNSYLVANIA: “In July, about 100 employees at Sallie Mae in Hanover Township [PA] lost their jobs.” (“Kanjorski Urges Sallie Mae To Add Jobs,” The Citizens' Voice [PA], 9/29/10)

INDIANA: “Although Indiana was spared the closure of entire Sallie Mae service centers, the state didn't escape the student-loan giant's restructuring. Sallie Mae laid off roughly 70 people, who mainly worked in IT, at its Fishers facility on Dec. 3…” (“Sallie Mae Restructuring Affects Indiana Jobs,” Indianapolis Business Journal, 12/8/10)

TENNESSEE: “While The Feds Gamble, Knoxville Pays… On Tuesday, President Barack Obama signed a bill, and that same day a Knoxville businessman announced that several of his employees would lose their jobs as a result. This can't be a good thing. The legislation involves student loans. …The Knoxville companies absorbing the blow are lender Edamerica and loan-servicing company Edfinancial Services. Tony Hollin, chairman and CEO of both companies, says up to 10 of Edamerica's 26 employees will eventually lose their jobs…” (Editorial, “While The Feds Gamble, Knoxville Pays,” The Knoxville News-Sentinel [TN], 4/2/10)

Even Senate Democrats Warned It ‘Could Put Jobs At Risk’

Letter From Sen. Jim Webb (D-VA), Sen. Mark Warner (D-VA), Sen. Tom Carper (D-DE), Sen. Ben Nelson (D-NE), Sen. Bill Nelson (D-FL):

“We write to make you aware of our concern with provisions of contemplated student lending reform that could put jobs at risk.” (Letter To Sen. Reid, 3/9/10)

· “…we must proceed toward this objective in a thoughtful manner that considers potential legislative alternatives…” (Letter To Sen. Reid, 3/9/10)

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