Current Credit Market and Student Loan Issues

There have been a growing number of stories that families may be hearing about the potential impact of the "subprime mortgage credit crisis" on the availablity of student loans for the 2008-2009 academic year.

We want to assure families that we do not forsee any problems with the availability of Federal Stafford, Federal PLUS and Federal Grad PLUS Loans for the 2008-2009 academic year. While families are always free to utilize any lender of their choice, we have identified a number of major lenders who have indicated their desire to participate in our electronic streamlined application process during the 2008-2009 academic year.

Families who have previously participated in these programs will notice that "borrower benefits" have been curtailed in many instances as recent legislation mandated cutbacks in subsidies that the government paid to lenders in the Federal Student Loan Program

We do anticipate that families who utilize private alternative loans to supplement financial aid awards will see changes in these programs for the 2008-2009 year. The extent of the changes will be driven by the credit history of the borrower and his/her co-signer for the loan. We have identified a number of lenders who plan to offer these loans to undergraduate and graduate and professional students for the 2008-2009 academic year.

Additional References:

• Impact of the Subprime Mortgage Credit Crisis on Private Student Loan Programs
• Additional Recent Articles on this Topic:

• "Panic Is the Enemy" posted on the Higher Ed Watch Blog on 2/21/08
• "The Credit Crunch Takes It Toll" posted on Inside Higher Ed on 1/23/08
• "Congress Urged to Tackle Student Loan Squeeze" posted on The Hill on 2/25/08
• 2/28/08 Letter To Department of Education Secretary Spellings
• "Credit Crisis May Make College Loans More Costly" posted on The Washington Post's website on March 3, 2008
• "How the Credit Mess Squeezes You" posted on The Wall Street Journal's website on March 3, 2008