A r c h i v e d I n f o r m a t i o n

 FOR EMBARGOED RELEASE:  11:30 a.m.            Contact:  Kerri Morgan  September 20, 1994                                    (202) 401-3026

DIRECT STUDENT LOANS EXAMPLE OF GOOD CUSTOMER SERVICE (RILEY)

FREDERICK, Md., Sept. 20 -- U.S. Secretary of Education Richard W. Riley today pledged to keep learners at the center of education improvement efforts and said the direct lending program is a prime example of the new federal commitment to customer service.

Riley spoke at Hood College, one of the first schools in the nation to participate in the new direct loan program.

"By eliminating all the middle men, and making student loans available directly to borrowers, we save money and make it easier for students to get the help they need," Riley said. "This is the kind of initiative that Vice President Gore envisioned when he called for a government that works better and costs less."

Riley's visit came on Customer Service Day, marked by the White House release of a report, "Putting Customers First: Standards for Serving the American People." Deputy Education Secretary Madeleine Kunin observed the day with a visit to Old Dominion University in Norfolk, Va. Other cabinet secretaries and agency heads held similar events in cities across the country.

Riley said the mission of the U.S. Department of Education is to ensure equal access to education and to promote educational excellence throughout the nation.

"States and communities have the primary responsibility for serving learners of all ages," Riley said, "but the federal government can be a concerned and active partner. Our efforts are focused on providing three essential services: offering leadership and strengthening partnerships for educational improvement; administering education programs; and meeting customers' information needs.

For example, Riley said, "We have worked with the Congress to pass the Goals 2000: Educate America Act to help states and communities bring high academic standards to all students. We're also working with a national coalition of more than 60 organizations to bring greater attention to the critical role that parents play in student achievement.

"Within the department we're working to improve the way we manage federal education programs to give grantees more flexibility to expend funds in ways that best serve those intended to benefit. We're making better use of technology and I think we're working smarter."

Hood College and Old Dominion University are two of the 104 schools now offering direct student loans. The new loans will be available at more than 1,000 schools next academic year.

Direct lending will save taxpayers an estimated $4.3 billion through fiscal year 1998 by eliminating excess profits in the current system and capitalizing on the federal government's ability to borrow at a lower interest rate. A streamlined system offering "one-stop shopping" will make borrowing easier for students.