Wachovia Suspends Its Undergraduate Private Student Loan Program

Student Loan Girl — Thu, 07 Aug 2008 00:41:00 GMT

After posting an $8.9 billion second-quarter loss in July, Wachovia Corp. announced on Tuesday that it would stop making private student loans to undergraduates (“Wachovia to Stop Writing Private Undergrad Student Loans,” CNN Money, Aug. 5, 2008).

Wachovia representative Ferris Morrison said the company’s student loan lending subsidiary, Wachovia Education Finance Inc., will continue to offer federal student loans, as well as private loans for graduate and professional education students. However, as of August 5, Wachovia is no longer accepting applications for private student loans for undergraduates.

“At this time, we felt it was prudent,” Morrison said.

Wachovia Education Finance, the sixth-largest provider of student loans, sent a letter to its borrowers on Tuesday informing them of the change, citing “the current overall financial industry environment,” reported Inside Higher Ed (“Quick Takes: Wachovia Abandons Private Student Loans,” Aug. 6, 2008).

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Two Purdue University Campuses Make the Switch to Direct Lending

Student Loan Girl — Tue, 20 May 2008 16:35:00 GMT

Beginning this fall, Purdue University’s West Lafayette and North Central campuses will become direct lending schools.

According to a press release issued by Purdue, the two campuses will offer federal student loans only through the U.S. Department of Education’s Direct Loan Program, under which students and parents will borrow directly through the Education Department (“2 Purdue Campuses Shift to Federal Direct Loan Program,” May 12, 2008).

The move marks a departure from the schools’ past ties to private lenders in the Federal Family Education Loan Program.

Pamela Horne, Purdue’s assistant vice president of enrollment management and dean of admissions, said the school made the switch to offer borrowers stability in a turbulent student loan credit market.

“We worked to identify sources for student loans that can provide stability and predictability to our families with a minimum of disruption,” she said.

More than 23,000 Purdue West Lafayette students and 5,500 parents borrowed $125 million in federal college loans during the 2006–07 academic year. During the same time frame, 5,118 students and 108 parents at the university’s North Central campus borrowed $9 million in federal student loans.

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Student Loan Blog : student loan credit market

Wachovia Suspends Its Undergraduate Private Student Loan Program

Two Purdue University Campuses Make the Switch to Direct Lending