Back from Surgery, Kennedy Calls On Community Colleges to Switch to Direct Lending

Student Loan Girl — Tue, 17 Jun 2008 18:11:00 GMT

Sen. Edward Kennedy, D-Mass., sent a letter Monday to the American Association of Community Colleges, urging its members to enroll in the government’s Direct Loan Program in order to ensure community college students have access to student loans for the 2008–09 academic year.

Kennedy, the chairman of the Senate Committee on Health, Education, Labor, and Pensions who is recovering from surgery to remove part of a malignant brain tumor, encouraged AACC member colleges to sign up for the direct lending program, which allows students and parents to take out student loans directly from the U.S. Department of Education.

Almost 100 lenders in the rival Federal Family Education Loan Program, in which student loans are provided by private lenders, have reduced or stopped offering borrower incentives, or have dropped out of the FFEL program altogether.

Government subsidy cuts and the fallout from the subprime mortgage crisis have hurt lenders and have prompted some to announce they will no longer offer student loans to certain community colleges and other two-year institutions whose borrowers tend to carry smaller, less-profitable loans.

"Since lenders continue to say they may have to limit new loans to certain colleges, it’s possible that the neediest students, particularly those at community colleges, will need an alternative to the bank-based FFEL program," Kennedy wrote.

David Baime, vice president of government affairs for the AACC, countered that the problem is not that student loans are inaccessible, but that community college students tend to borrow more money than they can afford to repay ("Kennedy Urges Community Colleges to Enroll in Direct-Loan Program," June 17, 2008).

That’s why the association is pushing a measure through Congress, Baime says, that would give colleges the authority to reduce maximum college loan amounts that students could borrow under the federal student loan programs.

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New Senator at the Helm of Higher Education Act Negotiations

Student Loan Girl — Tue, 03 Jun 2008 23:13:00 GMT

Sen. Barbara Mikulski, D-Md., will “pinch hit” for Sen. Edward Kennedy, D-Mass. — the chairman of the Senate Committee on Health, Education, Labor and Pensions who is recovering from surgery to treat a malignant brain tumor — in Senate and House negotiations to overhaul the Higher Education Act (HR 4137 and S 1642).

Mikulski, the third-most senior Democrat on the Senate committee, will handle the member-to-member negotiations between education leaders in the Senate and the House of Representatives, according to an article in CQ Politics (“Doctors Say Kennedy Brain Surgery Successful,” June 2, 2008).

Both sides are working to merge two Higher Education Act versions passed separately by the House and the Senate last year.

In mid-May the two houses had reached a compromise on college cost watch lists, college accreditation, and campus piracy, but that draft of the measure did not include provisions on graduate education, new programs, or private student loans.

It is unclear when Kennedy, who has worked to ensure undergraduates have access to student loans amid instability in the student loan credit market, will return to the Senate.

Kennedy underwent surgery June 2, for a malignant glioma, an aggressive tumor of the central nervous system, and will receive chemotherapy and radiation treatment over the next few weeks.

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Student Loan Blog : Senate Committee on Health

Back from Surgery, Kennedy Calls On Community Colleges to Switch to Direct Lending

New Senator at the Helm of Higher Education Act Negotiations