Concerns About Access to Student Loans Persist, Study Finds

Student Loan Girl — Thu, 24 Jul 2008 18:42:00 GMT

Some financial aid administrators have lingering concerns that students may not be able to get the student loans they need to pay for college this year despite recently passed federal legislation designed to improve students’ access to those loans, according to a recent survey.

The survey, released this week by the National Association of Student Financial Aid Administrators, showed that NASFAA members who participated in the survey felt that the Ensuring Continued Access to Student Loans Act, HR 5715, may help to alleviate a student loan shortage in the short-term but that a long-term solution is still needed.

More than half of the financial aid administrators who responded to the survey said they had been dropped by at least one lender in the Federal Family Education Loan Program, even though that same lender is still offering student loans to other institutions. Several lenders in the FFEL program announced last spring that they would stop offering student loans to colleges with high default rates, low loan volumes, or both — a practice that 60 percent of the NASFAA members who responded to the survey say is discriminatory and should be prohibited by Congress.

Survey participants were split over the issue of private student loans, which are not backed by the federal government. About half said they thought students would have a more difficult time obtaining private student loans this year but most agreed that the private student loan market has stabilized.

The survey, however, revealed that only a quarter of financial aid administrators have a backup plan in place to handle any problems should the federal and private student loan markets face further disruptions.

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Financial Aid Administrators Oppose New Preferred-Lender List Rule

Student Loan Girl — Thu, 24 Apr 2008 01:01:00 GMT

The National Association of Student Financial Aid Administrators has asked the Department of Education to reconsider its interpretation of a new rule that requires colleges to have at least three student loan lenders that are not affiliated with each other on their preferred-lender lists, according to an article by Kelly Field in The Chronicle of Higher Education (“Aid Administrators Urge Reconsideration of Rule on Preferred-Lender Lists,” April 28, 2008).

In a letter sent to the Department of Education, NASFAA President Philip Day, Jr., expressed members’ concerns that the rule is being interpreted too broadly and “could not come at a worse time.”

Financial aid officers are presently dealing with the uncertainty about access to student loans and many have already created their preferred lender lists, which under the Education Department’s new three-lender rule would have to be revised.

With peak student loan processing season currently underway, financial aid administrators fear that the rule, expected to go into effect in July, would severely limit students’ borrowing options.

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Student Loan Blog : NASFAA

Concerns About Access to Student Loans Persist, Study Finds

Financial Aid Administrators Oppose New Preferred-Lender List Rule