Following is the text of the March 24, 2008 communication to college presidents from HESC President James C. Ross regarding the stability of the FFEL Program:
Continued news regarding the student financial aid industry prompts me to write to you again and reassure you about the stability of the Federal Family Education Loan (FFEL) Program, and your choice to partner with the Higher Education Services Corporation (HESC) to meet the financial aid needs of your students.

As you may know, last year the federal government reduced the margin of profit for all participants in the federal loan program, making FFEL the lowest cost program for the taxpayer. Several FFEL lenders have withdrawn from the program, largely as a result of these changes, and some proponents of the Direct Loan Program have taken this as an opportunity to encourage schools to transition to direct lending.

As stated in my earlier correspondence, HESC works with over 100 lenders, and we are confident that all students will be able to obtain federal loan funds to meet their educational expenses. Some of HESC’s lender partners are eliminating student origination fees, paying the default fee and providing other borrower benefits to expand their presence in student lending.

There are many reasons that 80% of all New York student loans, in fact, most loans nationally, are FFEL loans, and why a large majority of New York’s educational institutions choose HESC as their guarantor. At HESC, we focus on providing solutions to meet our customers’ needs and distinguish us from other guarantors. That’s why we’ve developed customized processing for schools, built products like Alt Loan Connection and EFT Express, and provide important Financial Literacy training for your students.

HESC is proud of our ability to be at your school and work with your financial aid office when they need us. That is the dedication that you expect from your student financial aid agency and the service that we will continue to deliver.

As always, I welcome your input and look forward to future discussion.

Cordially,

James C. Ross