Paying for College Blog

The Future of Federal Student Loan Program: Daily Round-Up

Lots of action today to report:

• NASFAA President, Dr. Phil Day, in a letter to the membership today urged financial aid administrators to focus on the historic opportunity to make the Pell Grant a "true entitlement" and to come together to develop a new student loan model:

"If we simply oppose FFELP elimination without offering alternatives or including ourselves in the debate, schools will be forced to move to the Direct Loan program, either because the Obama budget will have been accepted or because ECASLA expires in 2010.

We must move forward in good faith and help design a system that works best for borrowers, taxpayers and institutions. In addition to the importance of providing a workable alternative to the abrupt elimination of FFELP, we must also remember the historic opportunity we have to make the Pell Grant a true entitlement. This is a goal that NASFAA has worked toward for decades, and there are many who never believed we would be so close to seeing this essential change enacted."

What To Do If School Closes Down and You Have Student Loans

Here are just a few stories that I recently came across of schools shutting their doors. 

• Connecticut School of Broadcasting shuts doors in Chicago and nationwide this month.
• Falcon Airlink flight training school of Fletcher, North Carolina shut its doors in early February.

If your school is shutdown and you have loans, loan relief is available.  According to the Department of Education website, if you have a federal loan serviced through the National Payment Center: 

Informative Q&A with Mark Kantrowitz

The  Detroit Free Press had an information webchat with Mark Kantrowitz today.  Download the transcript here:  Download Mark_Kantrowitz_WebChat_012909

The  Detroit Free Press had an information webchat with Mark Kantrowitz today.  Download the transcript here:  Download Mark_Kantrowitz_WebChat_012909

Tips for Repaying Your Student Loans

A timely article from Kiplinger's about the various options available for repaying federal and private student loans.  With the six month grace period ending for students who graduated in the spring of 2008 and a difficult employment situation, this is key topic. 

Key points:

A Silver Lining: Federal Loans Still Available

With all the downbeat news on the credit markets, WSJ (Wall Street Journal) story makes a good point that federal student loans, which constituted 78% of student loans for the 2007-08 school year, are still widely available and even growing as more students apply for them.  The article cites statistics from the Department of Education that as of the end of November 2008, federal student loans had increased by 18.6% as compared to the year earlier.