State PIRGs' Higher Education Project
218 D Street SE
Washington, DC 20003
(202) 546-9707

Director:
Ivan Frishberg

Advocate:
Ellynne Bannon

 

FOR IMMEDIATE RELEASE
Tuesday, April 13, 2001

Students and Colleges File Legal Briefs Opposing Anti-Student Lawsuit From Lenders

U.S. PIRG, the U.S. Student Association, the National Direct Loan Coalition and the American Association of State Colleges and Universities filed legal briefs today supporting the Department of Education’s motion to have a lawsuit from a group of private lenders dismissed.

“The briefs filed today make clear that the government acted correctly in providing increased benefits to student borrowers.  The lenders who filed this suit have forgotten that the student loan programs are intended to benefit students – not banks,” said Ivan Frishberg, Director of the State PIRGs’ Higher Education Project.

The lawsuit, filed by a group of lenders in the federally subsidized student loan program, seeks to eliminate several benefits in the Direct Student Loan program that is operated by the federal government.  Those benefits mirror similar terms and conditions offered in the federally subsidized loan program that is operated by a network of private banks, servicers and guarantee agencies.

“This brief was filed to support students. If the plaintiffs—the private lenders and agencies—win this lawsuit, the real losers will be the thousands of students who will be forced to pay higher loan rates. Clearly it is in their best interests to have access to the lowest possible costs in securing loans,” said Constatine Curis, President of the American Association of State Colleges and Universities, which represents more than 425 colleges, universities and systems of public higher education.

Secretary Paige recently filed a response to the lender lawsuit and a motion of summary judgment, asking that the case be dismissed.