Following is the text of the June 5, 2008 communication to college presidents from HESC President James C. Ross regarding continuing positive momentum in the FFEL Program:

As you know, I have written to you a number of times recently to voice my confidence in the stability of the Federal Family Education Loan (FFEL) Program. I have maintained my belief in the fundamental soundness of the program and that, where necessary, Congress would step in to shore up any tactical programmatic weaknesses.

I am pleased to let you know that this is exactly what has happened.

With the passage of HR 5715 Congress has created a secondary market for student loans, making sure that lenders have sufficient capital for new loans this year. In addition, it has accommodated additional borrower need by increasing annual and aggregate Stafford loan limits and easing some restrictions on parent loan eligibility.

To implement these changes, Secretary of Education Margaret Spellings issued a Dear Colleague letter on May 21, 2008. In this letter the Secretary stated that “the Administration is committed to ensuring continued and timely access to federal student loans for all eligible student and parent borrowers. We also are committed to designing programs that respect and support the current FFEL Program as a successful public/private partnership, while protecting taxpayer interests.”

This action by Congress and the Department of Education has had the desired effect of reassuring lenders about the viability of the FFEL Program. Sallie Mae and Nelnet have issued statements that they will remain in the program and, to date, four lenders that had suspended participation in FFEL have informed HESC that they will return.

While the uncertainty in the capital markets still presents issues in private loans, I want to reiterate the point I’ve made so often in recent weeks: All New York students and families who want loans through the FFEL Program will have loans available to them this year.

HESC is ready for the new school year. We have completed system programming to accommodate the changes mentioned above in advance of the July 1, 2008 effective date.

Now we’re looking forward to working with you to help students and families further their dreams of higher education.

Cordially,

James C. Ross