President's Message: Delivering the Finest Education Loan Services

The other day I received a phone call from the financial aid director of a university that USA Funds^® has served for many years. He called because he was concerned about news reports of staff cutbacks at Sallie Mae, with which USA Funds contracts for a variety of services, and the potential impact on the service his institution receives from USA Funds.

Because many of you undoubtedly have similar concerns, I’m sharing my responses to this financial aid director with you.

Lenders and guarantors in the Federal Family Education Loan Program are adjusting to the more than $20 billion in federal funding cuts enacted in the College Cost Reduction and Access Act. The impact of this federal legislation has been exacerbated by the credit crunch, which has significantly increased the cost to lenders of the funds they lend to students.

Throughout this period of adjustment, I and my staff at USA Funds have been in close contact with our colleagues at Sallie Mae regarding the services that Sallie Mae provides under contract to USA Funds. We have received assurances directly from Sallie Mae President C.E. Andrews and from others in Sallie Mae’s executive management that the Sallie Mae staff reductions will not adversely affect service levels delivered on USA Funds’ behalf.

Many of the Sallie Mae staff affected by the work force reduction did not directly support USA Funds’ services. In any case, USA Funds’ management and staff are committed to ensuring that the service levels you have come to expect from us are not diminished by these changes.

We also believe that USA Funds’ contractual relationship with Sallie Mae has produced and will continue to provide tangible benefits in the form of enhanced products and services to our customers. In fact, in the coming months, this relationship will be generating new products — including an online curriculum for our popular financial literacy program, USA Funds Life Skills^®, and online loan counseling programs directed to graduate and professional students — to enhance the services we offer you and your students.

As I wrote to many of you and your campus executives last November, USA Funds’ top priority is to shield our school-customers and their students and parents from the impact of the federal budget cuts on the education loan services that they receive from USA Funds. We intend to continue to deliver the finest education loan services to postsecondary institutions and their staffs and students.

Carl Dalstrom is president and CEO of USA Funds.