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Letter From the Senior Advisor to the Secretary

PublicationDate: 1/31/96
Summary: Letter From the Senior Advisor to the Secretary
Author: OPE - Office of the Assistant Secretary for OPE

January 31, 1996

Dear Colleague:

I am taking this opportunity to tell you that Direct Loans is alive and
well in Washington, DC. In spite of Congressional action to curtail the
Program (which was vetoed by President Clinton) the government
furlough, and Mother Nature, we are about to begin our third year of
operation.

We are pleased to share some good news with you about Direct
Loans. This week we reached the $7 billion mark in loan volume. We
are very proud of the fact that we are enabling more than one
million borrowers to receive the benefits of postsecondary education
through a greatly simplified loan program.

In addition, we have reconciled and closed out 99 percent of all the
transactions processed for the 1994-95 academic year. This means
that we have almost completely closed out our first year of
operation within 6 months of year end--a significant achievement
never before equaled by any Federal student aid program..

The government employee furlough (not to mention the Blizzard of
1996 and the subsequent floods) slowed us down just a little bit, but
certainly didn't stop us. We are proceeding with the cut-over of our
Loan Origination System from CDSI's Utica Servicing Center to
EDS's Loan Origination Center in Montgomery, Alabama.

You will be receiving a Direct Loan Newsletter very soon that will
provide you with detailed information on upcoming training (for both
continuing schools and those new to the Program for
1996-97) and how the transition to the new contractor will affect you
and your students. We will be working as hard as we can to ensure
that any disruptions to processing will be minimized.

Finally, President Clinton, Secretary Riley, Deputy Secretary Kunin
and all of us here in the Department of Education remain totally
committed to providing this Nation's institutions with the
most efficient service possible as we work together to assure access to
postsecondary education.

If there is anything we can do to help you, please do not hesitate to let
us know. You may contact the Direct Loan Task Force on
202-708-9951.

Sincerely,



Leo L. Kornfeld
Senior Advisor to the Secretary