Student Loan Blog : Associated Press

Mom Accused of Gambling Away Daughters’ Student Loans

Student Loan Girl — Mon, 06 Apr 2009 20:11:00 GMT

A St. Peters, Mo. woman has been charged with seven counts of forgery for taking out $139,000 in student loans in two of her daughters’ names and for using her 71-year-old mother as a cosigner on the loans, all without consent.

The woman, Cynthia Tiemann, forged seven student loan checks in order to feed a gambling addiction, The Associated Press reports (“Police: Mom Took Out Student Loans to Gamble,” April 3, 2009).

One of Tiemann’s daughters discovered the forgeries nearly 18 months after the unauthorized student loans were taken out.

“Her father suggested that she start learning about her credit so he suggested that she pull her credit report online and that’s when she found out about the student loans that were taken out in her name,” said St. Peters public information officer Melissa Doss (“ Family Fraud: Missouri Mom Accused of Gambling Daughter’s Student Loans,” WDAF Kansas City, April 2, 2009).

The daughters were forced to turn in their mother in order to remove the student loans from their credit reports. The girls, now ages 20 and 22, had to prove that they were each the “victim of a crime.”

“If they weren’t a victim of a crime [removing the loans] would have been impossible for them to do,” Doss said.

Tiemann is being held on a $50,000 bond and is scheduled to appear in court today.

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Despite Down Economy, College Student Aid Still Thriving

Student Loan Girl — Tue, 24 Mar 2009 00:18:00 GMT

In economic downturns, colleges and universities become flooded with students of all ages looking to better prepare themselves for an increasingly competitive job market. But these schools haven’t been immune to the effects of today’s recession.

Fortunately, for every recent economic downturn in higher education — tuition hikes, state budget cuts, scholarship and grant cutbacks, and a fluctuating student loan market — there’s also been a tangible upside (“Glimmer of Hope for Student Aid in a Bad Economy,” USA Today, March 19, 2009).

Tuition Assistance

Downside: Public colleges have increased tuition by 4 percent per year over the past 10 years, and many schools are set to bump up tuition even more this year as they face unprecedented state budget cuts.

Upside: Federal stimulus money should help some public colleges to better cope with the loss of state funding and to minimize any increases in tuition. The state of Maryland is hoping to go a fourth-straight year without in-state tuition increases. Other colleges are offering one-time deals to students; Kent State University in Ohio is offering laid-off workers a one-time tuition and application waiver at its Trumbull campus, and Manchester College in Georgia is offering to refund one year of tuition for students who aren’t able to secure a job or admission to grad school within six months after graduation.

Institutional Aid

Downside: Trouble in the stock market has caused colleges’ endowments to drop 25 percent in value this year, which has severely hampered schools’ ability to offer scholarships.

Upside: Despite their endowment losses, more than 90 percent of the nation’s private colleges and universities will be increasing financial aid next year by 9.8 percent to make up for 4-percent tuition increases, according to the National Association of Independent Colleges and Universities.

Government Grants

Downside: Aid for merit scholarships has taken one of the biggest hits this year, primarily due to state budget cuts.

Upside: The federal stimulus package has increased the maximum award for Pell Grants — federal financial aid for low-income students — from $4,731 to $5,350 for the coming academic year and to $5,500 for the 2010–2011 academic year. And, an additional 800,000 students are expected to receive Pell Grant funding this year.

Federal Student Loan Programs

Downside: The $50 billion Federal Family Education Loan Program — the government program that provides federal student loans to more than 10 million students through third-party lenders — has been the larger of the two federal student loan programs. But over the past two years, the FFEL program has lost business to the Direct Loan Program, the government’s other federal student loan program through which the U.S. Department of Education provides federal student loans directly to families, as hundreds of cash-strapped FFELP lenders have been forced to exit the program.

Upside: The FFEL program has still managed to increase its student loan volume this year, and some lenders are returning to the student loan market now that the federal government has bought nearly $25 billion in lenders’ student loan securities, providing them with the capital to make new loans. The Direct Loan Program has picked up the slack, providing an additional $7 billion in lending this year.

Private Student Loans

Downside: The overall supply of capital for private student loans is estimated to have decreased by one-third — a decrease of between $6 billion and $7 billion — due in large part to the fact that lenders have made it harder for families to qualify for private student loans.

Upside: Increased government funding for federal Stafford student loans has helped to reduce students’ reliance on private student loans. And more students are maxing out their federal financial aid before turning to private student loans, which the USA Today suggests has helped students avoid over-borrowing in private student loans.

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What’s Up Doc? Medical Schools Expand as Economy Retracts

Student Loan Girl — Thu, 19 Mar 2009 22:15:00 GMT

Looking at the growth of medical schools in the United States you’d never know America is in the middle of a recession.

Even as the economy continues its downward spiral, medical schools are expanding, says Dr. J. James Rohack, president-elect of the American Medical Association.

Whereas about 25 years ago medical schools were advised to cut or cap enrollment to help steady the field’s growing surplus of doctors and limit the high level of competition for medical services that was contributing to rising health care costs, new projections indicate that the nation may soon be facing a significant doctor shortage.

“Americans are living longer, and there are more of them,” Rohack says. “It's clear that the demographics of American society point to the need of having and expanding a well-educated medical work force” (“Boom Amid Bust: Med Schools Grow as Economy Tanks,” Associated Press, March 10, 2009).

Responding to this potential shortfall in physicians — especially in light of data that suggests the elderly population is living longer — more colleges and universities are expanding into the field of medicine education; four new accredited medical schools are scheduled to open this year, increasing the number of medical schools to 130. Another five medical schools have applied for accreditation and plan to begin accepting students no later than 2010 or 2011.

Admissions applications are also on the rise at existing medical schools, jumping 21.4 percent from 2003, when there were 34,786 applicants, to 42,231 medical student applications in 2008. Medical school enrollments were up just over 9 percent during that same period with 18,036 new medical students being accepted in 2008.

But even if medical schools continue at this impressive growth rate, the AAMC says they still won’t be able to meet the nation’s demand for doctors. The United States may have only about 750,000 doctors by 2025, approximately 159,000 fewer than the country needs, according to a report the AAMC issued in 2008.

These projections indicate that the actual doctor shortfall may be worse than originally believed, especially if U.S. population growth continues to outpace the number of doctors being trained and if more doctors retire than expected.

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College Scholarships Dry Up Along With Endowment Funding

Student Loan Girl — Tue, 17 Mar 2009 21:17:00 GMT

For the six-month period ending in December, college endowments nationwide lost an average of 24 percent, according to the nonprofit Commonfund Institute of Connecticut, forcing a handful of small regional universities to make significant cutbacks to their scholarship funds for the upcoming fall semester (“More Bad News on Campus: Scholarships Drying Up,” Associated Press, March 12, 2009).

This year, Eastern Washington University in Cheney, Washington, provided half a million dollars for 500 scholarships, said Mike Westfall, vice president for university advancement. After experiencing a 20-percent drop in its endowment, the school will only be able to provide $100,000 in scholarships for the coming academic year, which, Westfall said, will significantly impact its student population.

“Over 50 percent of our students are first-generation students. First-generation students tend to be more dependent on financial aid. To take that away is troubling,” he said. To make up the difference, Eastern has increased its fundraising efforts and created a new scholarship website.

Rhode Island College, which saw a 22-percent drop in its endowment this year, has decided to suspend all scholarships for the upcoming school year, largely because the college’s endowment scholarship fund is “underwater” after dipping below the amount the fund started with.

The University of Wisconsin-Superior will have to offer approximately $100,000 less in endowed scholarships next year based on the decline in value of its endowment.

And with only $200,000 available for scholarships next year — after distributing about $900,000 this current year — Western Washington University in Bellingham plans to increase scholarship fundraising for the fall to cover its 30-percent drop in endowment funds.

The school would also like to increase funding for its $800,000 annual scholarship campaign to make up for endowment losses, said Stephanie Bowers, vice president for university advancement and executive director of the university foundation.

Bowers characterizes next year’s scholarship prospects as bleak, but said that she remains hopeful about the future, “When you work for a foundation, you take the 100-year view.”

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Students Could Save $40,000 by Completing College Degree in 3 Years

Student Loan Girl — Fri, 27 Feb 2009 20:31:00 GMT

Students attending Hartwick College in New York may now be able to save over $40,000 on their education by enrolling in a new three- year college degree program, according to a recent news release from the college (“Hartwick College Announces Three-Year Bachelor’s Degree,” Feb. 24, 2009).

The new initiative will reduce colleges costs for the school’s students and their families by 25 percent at a time when the country remains deeply mired in a recession, but, Hartwick officials contend, the program will maintain the “rich educational experience” that is characteristic of the school.

“This three-year program will deliver the same educational opportunity to qualifying students as our four-year program,” said Dr. Margaret Drugovich, Hartwick’s president. “We believe it is imperative for the higher education community to preserve the option of a top-quality education for any student who seeks it, regardless of the prevailing economic challenges or personal circumstances.”

To qualify for the three-year college degree program, students must have graduated high school with at least a 3.0 GPA. Once enrolled, students must take 40 credits each academic year instead of the usual 30, and take classes during a special January term each year in order to complete the standard 120 credits needed to graduate. The required extra winter session will allow students to keep their summers free for study abroad, internships, research practicums, or spending time with family.

Increased Interest in Three-Year Programs

Drugovich is anticipating a great deal of interest in the three-year degree program, but her students aren’t the only ones taking notice of these types of programs. With the skyrocketing cost of college continuing to squeeze families often already hard-pressed to come up with money for school, the concept of a cheaper three-year degree may be gaining favor.

At the American Council on Education’s annual meeting held earlier this month, Sen. Lamar Alexander, R-Tenn., a former university president, urged more college presidents to consider three-year college degrees at their institutions, the Associated Press reports (“Some Colleges Offering Degrees in 3 Years,” Feb. 24, 2009).

And lawmakers in Rhode Island are drafting legislation that would encourage three-year college degree completion. Their bill would create standardized college-level classes for the state’s high schools that would be intended to enable all students to complete college in only three years.

Three-Year Degrees Face Uncertain Future

But prior to the country’s recession, three-year degrees had largely failed to catch on.

At Upper Iowa University, only five students have chosen to pursue the school’s three-year degree program over the five years it has been in existence and every one of those five students ended up taking four or more years to complete their degree. The school has not had a single student interested in the program since.

Educators attribute the lack of participation in these accelerated programs to the fact that students may still prefer the full four- year college experience, academically, socially, and athletically, Joy Newcom, spokeswoman of Waldorf College, told the Associated Press about her Iowa school that is just now phasing out its last three-year program due to lack of student interest.

Newcom said, “What we’re finding they’re saying is, ‘Why did I want to grow up so fast?’ .”

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Note to Families: Financial Aid More Competitive, But Not Out of Reach

Student Loan Girl — Tue, 27 Jan 2009 00:09:00 GMT

With more families applying for financial aid — applications are already up 10 percent above last year’s record — and lending for private student loans drying up, families’ ability to find available financial aid is becoming more difficult, reports the Associated Press (“College Financial Aid System Facing Stiff Test,” Jan. 25, 2009).

Traditional sources of college funding are no longer available: Home values are dropping, making it difficult for families to get a home equity loan, college savings accounts are dwindling, and private lenders are leaving the student loan market.

Currently, only 21 of the 60 third-party student loan lenders who issued $19 billion in federal and private student loans last year are still lending, and most of the lenders still issuing loans have severely tightened their credit criteria, according to Finaid.org, a college funding resource site.

Families face limited financial aid options at a time when state funding shortages have forced numerous state colleges to cut their financial aid budgets and replace grants and scholarships with student loans in their financial aid offers. Colleges are also increasing tuition, in some cases, by double digits.

“There are no sure answers because we’re in new territory,” said Bruce Hammond, a college admissions consultant based in Washington, D.C. “But students with high need and lesser credentials are going to have to brace themselves for less aid.”

Financially Needy Students Should Know Their College Funding Options

While the financial atmosphere for college students and their families may seem more dismal this year, things “are not as scary as people might think,” says Lauren Asher of the non-profit California-based Institute for College Access and Success.

Students and parents can take advantage of expanded federal financial aid offers. The U.S. Department of Education has already made $95 billion in grants, loans, and work-study assistance available to nearly 11 million students and families and Congress has increased annual borrowing limits for unsubsidized Stafford student loans, which are not tied to financial need, by $2,000. And President Obama’s proposed stimulus package could offer families even more financial aid.

Cash-strapped families and students could consider attending lower-cost public schools and community colleges to avoid taking on large amounts of debt. On average, tuition and fees at a two-year public school cost about $2,300, while tuition and fees at a four-year public school cost about $6,000, according to the College Board.

And while a number of the nation’s top colleges and universities, including Harvard , Yale, and Duke, have seen their endowments take a huge hit this year, none of these schools have gone back on their commitment to offset their high tuition costs by extending financial aid offers to a greater number of low- and middle-income families.

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New Southern California Law School to Offer Free Tuition

Student Loan Girl — Mon, 29 Dec 2008 23:15:00 GMT

The University of California Irvine will usher in its first class of law school students this fall, none of whom will have to pay tuition for their first three years, reports The National Law Journal (“Irvine, Calif., Law School Gets New Name, Offers First Class Full Tuition Scholarships,” Oct. 22, 2008).

Although the UC Irvine School of Law — the first new public law school in California in 40 years — has not yet determined the cost of tuition, it anticipates being able to offer full tuition scholarships to all 60 students in its inaugural class. UC Irvine estimates that the three-year tuition scholarships, which will only be available to the law school’s inaugural class, will be valued at $100,000; the school has already raised more than one third of the approximate $6 million needed for the scholarship program.

Dean Erwin Chemerinsky, a well-known constitutional law scholar, says he has high hopes that the UC Irvine School of Law, which will focus on public interest law, will rank among the top 20 law schools in the nation from the first time it is considered in the rankings.

Reaching that goal will be difficult, but not impossible, says Richard Morgan, the founding dean of the William S. Boyd School of Law at the University of Nevada at Las Vegas (“SoCal Law School Tempts Students With Free Tuition,” Associated Press, Dec. 25, 2008).

“It’s like trying to fly the plane, while you’re still building it,” Morgan said.

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State Higher Education Commission Urges Indiana Schools to Graduate 10,000 More Students a Year

Student Loan Girl — Wed, 10 Sep 2008 20:58:00 GMT

A new plan unveiled Monday by the Indiana Commission for Higher Education calls for the state-supported colleges and universities in Indiana to graduate 10,000 more students with bachelor’s degrees each year — an increase of 33 percent — and to graduate these students in just four years, according to the Associated Press (“Indiana Seeks 10,000 More College Graduates a Year,” Sept. 9, 2008).

Under the proposed plan, Indiana would rank among the top 10 states in the nation for college degree completion by 2012. Indiana is currently 10th in the nation for the number of its high school graduates who enroll in college — 62 percent — but 57 percent of the state’s college students take six years to graduate and only 36 percent graduate within four years.

“We want more degrees and we want them on time,” said commission member Gerald Bepko, former chancellor at Indiana University-Purdue University Indianapolis.

To motivate state schools to improve their four-year graduation rates — a move that the commission contends will reduce students’ college costs and student loan debt — the commission proposes that state funding be tied to a college’s degree completion rate rather than its enrollment growth.

“They used to say, ‘Give us more money and we’ll do a better job,’ ” said Stan Jones, state commissioner of higher education. “We’re saying, ‘Do a better job and we’ll give you more money.’ ”

The commission also hopes to build up the state’s community college system to make it easier, financially, for students to complete their bachelor’s degree in four years. The commission recommends that community colleges work to double their enrollment over the next 10 years and make the first two years of community college tuition free for students whose families earn less than $50,000 a year.

The plan would, in addition, make more families eligible for state financial aid by raising income limits.

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Sex Offenders May Lose Pell Grant Eligibility Under Revised Higher Education Act

Student Loan Girl — Mon, 04 Aug 2008 23:49:00 GMT

Starting July 1, 2009, sex offenders confined in treatment centers throughout the country may no longer be eligible to receive need-based federal Pell Grants, under a new provision of the reauthorized Higher Education Act, according to an article in the Associated Press (“Congress Cuts Off College Aid For Sex Offenders,” Aug. 4, 2008).

President Bush has yet to sign the act into law, but after the act passed through Congress July 31, Rep. Ric Keller, R-Fla., said, “Today, the most insane wasteful spending program in America comes to an end.”

Keller cited an AP article from March that revealed dozens of rapists and child molesters had taken higher education classes at taxpayers’ expense while confined to treatment centers after serving their prison sentences. Some prisoners were using the financial aid to buy clothes, DVD players, and music CDs even after they had dropped their classes in some cases.

While the U.S. Department of Education does not know exactly how many sex offenders receive Pell Grants, spokeswoman Stephanie Babyak predicted that making sex offenders ineligible for the aid would save taxpayers millions.

Critics say the new measure may rule out a higher education for sex offenders who are trying to rehabilitate themselves. Instead of cutting off grant aid to all sex offenders, Congress should better regulate how it administers the program in order to help prevent abuses, said Michael Macleod-Ball, chief legislative and policy counsel for the American Civil Liberties Union.

The grant aid provision would affect the 20 states that allow violent sex offenders — those who it is believed would likely repeat their crimes if they were to be released — to be held indefinitely in treatment facilities after they have served their prison sentences. Prison inmates have been ineligible for Pell Grants since 1994, but sexual offenders can qualify for the grants once they are transferred from prison to treatment centers.

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Feeling the Pinch of Rising Food and Gas Prices, Students Flock to Food Banks

Student Loan Girl — Tue, 29 Jul 2008 19:42:00 GMT

The rising cost of food and gas has become so taxing for some students that food banks in college towns are beginning to see an influx of students, according to an Associated Press article (“Struggling College Students Turn to Food Banks,” July 26, 2008).

The University District Food Bank located in a college neighborhood near the University of Washington campus has seen a 25-percent increase in demand and now serves about 150 students a week.

And the Community College of Denver, which runs its own food-assistance program for students, asked the school this year to double its annual budget to $3,000 to account for a 50-percent increase in demand.

With food prices rising 5 percent in the past year — the highest increase in nearly two decades — and gas prices topping four dollars a gallon across the country, “more and more, it’s just the typical traditional student, about 18 to 22, that’s feeling this crunch,” says Larry Brickner-Wood, director of the Cornucopia Food Pantry at the University of New Hampshire.

Doug McManaway, a University of Washington student, says that after paying for rent he only has $100 left to spend on food for the rest of the month. A food bank may be his best option, he says, although “it kind of grosses me out.”

“But if my parents say, ‘No, we’re not going to give you any more money,’ ” McManaway says, “[food banks] may be a last resort.”

While food stamps are another option for students, qualifying for the program is a more complicated and restrictive process than getting in to most community food banks, which most often just ask students to provide a student ID to prove they live in the area.

To be eligible for food stamps, college students generally must be on public assistance benefits, work at least 20 hours a week in a state or federal work-study job, and take care of a dependent household member under the age of 6. Students who are enrolled in employer-sponsored job training classes may also be eligible.

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Veterans See Education Benefits Double as New GI Bill Becomes Law

Student Loan Girl — Mon, 30 Jun 2008 21:00:00 GMT

The new GI Bill, signed by President Bush on June 30, more than doubles veterans’ education funds from the current $40,000 to $90,000, and is seen as a return to the same generous benefits extended to veterans of World War II, according to an Associated Press article (“Bush Signs $162 Billion War Bill,” June 30, 2008).

The new legislation will allow veterans who served in the wars in Iraq or Afghanistan for at least three years to attend the most expensive public institution in their state, all expenses paid. Soldiers will also receive a small monthly stipend for housing and may transfer their benefits to their spouse or children.

For those veterans who opt to attend more expensive private schools, the new GI Bill will match any aid that their institutions provide above the cost of the most expensive public college in their state.

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More Rigorous Admissions Standards at Nevada Universities May Affect Minorities

Student Loan Girl — Tue, 17 Jun 2008 00:05:00 GMT

NAACP and ACLU officials warn that with the University of Nevada, Las Vegas, and the University of Nevada, Reno, increasing their minimum grade point average from 2.75 to 3.0, minority students may be discouraged from pursuing a higher education, according to an Associated Press article (“NAACP, ACLU Concerned About Tougher Admission Standards at Nevada Universities,” June 15, 2008).

Citing a report that showed a drop in enrollment among minority students the last time these schools raised their minimum GPA requirements, the two organizations have expressed concerned that this move may have a disproportional impact on minority students.

In 2006, the two universities increased the minimum GPA requirement from 2.5 to 2.75, which resulted in a 22-percent decrease in black student enrollment and a 50-percent drop in Native American and native Alaskan students at UNLV for that year, according to another Associated Press article (“Freshmen Enrollment Dips at Nevada Universities,” June 14, 2008). That same year, University of Nevada, Reno experienced a 10.6-percent decrease in Hispanic student enrollment.

University administrators claim that those students who meet the new, more rigorous standards will be better able to succeed in the classroom. High school students seeking admission to UNLV or the University of Nevada, Reno with low GPAs, will be able to apply with their SAT or ACT scores instead of their grades.

Students denied admission due to low GPAs may improve their academic performance at a state or community college prior to attending one of the two state universities.

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Wilkes University Puts Freshman Recruits Front and Center and Billboard-Size

Student Loan Girl — Sun, 04 May 2008 22:56:00 GMT

Wilkes University, a small, private school in northeastern Pennsylvania, is using a quirky new in-your-face $120,000 ad campaign to get the attention of today’s media- and marketing-savvy students.

The university is plastering personalized messages on billboards, pizza boxes, gas pumps, and even on MTV, VH1, and Comedy Central to students it wants to make a part of its freshman class, reports Michael Rubinkam in a story by The Associated Press (“Pennsylvania College Woos Students by Putting Them in Ads,” April 30, 2008).

The “trendsetting and forward-thinking” marketing campaign appeals to the “look-at-me generation,” teens comfortable sharing all-things-personal on social networking sites like Facebook and MySpace, says Nancy Costopulos, chief marketing officer of the American Marketing Association.

The Message: Personalized and Not for the Shy

Wilkes features applicants in its ads who have a “mix of talents and determination” and who live in markets where the university wants to promote itself, says Jack Chielli, the school’s director of marketing. Students must also consent to having their names used.

The ads, writes Rubinkam, are meant “to convey the message that the school gets to know its students personally and pays close attention to their needs.”

To get messages with the right personal touch, 160over90, the Philadelphia marketing firm contracted by Wilkes, interviews participating students and their friends and families, uncovering likes, dislikes, hobbies, nicknames.

The agency uses the information it gleans from these in-depth interviews to design the highly personalized ads that have turned some college-bound seniors into quasi-celebrities in their high schools and communities:

“Lake Lehman senior Greg Heindel: You give your time at the soup kitchen, the firehouse, and your church summer camp. Wilkes University would like to give you something — a top-quality education.”
“Hey Kristen Pecka. Only your closest friends at Central Catholic call you Pecka-lecka-lecka. Choose Wilkes University and add 2,362 more people to that list.”
“Scranton High senior Nicole Pollock: Our goal at Wilkes University is to be as much a mentor as your mother has been. (Now, if we could only make her ravioli.)”

Each ad includes an invitation to “call a Colonel” (the school’s mascot) and provides a phone number that plays a recorded message from a current Wilkes student.

It’s the Thought That Counts

Even if targeted recruits end up choosing another school, says Chielli, he considers the ads successful as long as they continue to grab attention and get other students to think about Wilkes.

But besides drawing more students to apply, the school wants to help make it possible for them to actually attend: Nearly all students receive some form of financial aid apart from student loans to help cover the $25,000 price tag. Wilkes awards $22 million in financial aid each year.

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Pennsylvania Student Loan Agency to Cut Grant Aid, Offer Employee Buyouts

Student Loan Girl — Thu, 01 May 2008 00:06:00 GMT

Pennsylvania’s student-loan agency will cut college grant amounts for the 2008–09 academic year by up to $750 and will offer voluntary buyouts to some of its nonunion employees in an effort to keep the company afloat.

The Pennsylvania Higher Education Assistance Agency will determine the adjusted grant amounts based on a recipient’s college costs, family size, and the number of children from the family enrolled in college. Next year’s awards will range from $2,100 to $3,948, compared to this year’s awards which ranged from $2,500 to $4,700.

The agency expects to save $12.5 million annually with the nonunion buyout agreements, after losing more than $37 million in the nine months leading up to March 31, agency spokesman Keith New said in an Associated Press article, (“Pa. Student-Loan Agency to Cut Aid, Offer Employee Buyouts,” April 24, 2008).

During the same period last year, the agency earned nearly $113 million in operating income.

Employees eligible for buyouts will receive two weeks’ pay for each year of service at the agency for up to 16 weeks. The number of buyouts needed to steady the company has yet to be determined and is dependent on the salaries of departing employees.

The agency, which New said has “never before experienced more difficult or severe economic conditions,” will only impose layoffs as a last resort.

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Arkansas Offers State Student Loan Agency $80M Line of Credit

Student Loan Girl — Thu, 24 Apr 2008 23:53:00 GMT

The Arkansas state student loan authority has been tentatively approved for an $80 million loan after an announcement that it may not be able to continue issuing student loans without financial assistance.

The state board of finance, the investment arm of the state treasurer’s office, unanimously approved the line of credit to the Arkansas Student Loan Authority, whose ability to offer student loans has been severely compromised by the nation’s ailing economy, according to an Associated Press article (“Arkansas Offers $80M to Help Student Loan Agency,” April 24, 2008).

At a meeting next month, the five-member board will vote on the final terms and conditions of the loan, which will be issued from state treasury funds that would normally be invested in banks.

Mark Conine, the authority's chief financial officer, told the Associated Press the money would solely be used to issue student loans. The authority issued $70 million in new loans last year.

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