NASFAA News provided some updated information on Friday (March 6, 2009) for FFEL and Direct Lending trends. Here is a summary based on this information:
Market Share Analysis
| Program | 2008-09 | 2007-08 |
| DL | 26.1% | 20.5% |
| FFELP | 73.9% | 79.5% |
Growth (2008-09 vs. 2007-08)
| DL | FFELP | OVERALL | |
| Schools | 51.1% | -3.5% | 6.9% |
| Loans | 55.2% | 14.3% | 23.6% |
| Loan $ | 54.2% | 12.2% | 20.8% |
Data provided by NASFAA News:
Direct Loan volume as of Feb. 25, 2009 compared to last year's volume
| 2008-09 | 2007-08 | |
| Schools | 1,620 | 1,072 |
| number of loans | 4.5 million | 2.9 million |
| total loan dollars | $20.2 billion | $13.1 billion |
Same for FFEL as of Feb. 26 2009
| 2008-09 | 2007-08 | |
| Schools | 4,424 | 4,583 |
| number of loans | 11.2 million | 9.8 million |
| total loan dollars | $57.1 billion | $50.9 billion |
So, what factors may have driven the steep federal loan growth?
- More students applying for federal aid given the difficult economic times
- NASFAA reported on Friday (based on data from the Department of Education) that FAFSA filings have risen by 20% for this processing year.
- The analysis above indicates that the number of loans rose by 23.6% while loan volume was up 20.8% so the average loan size actually went down for 2008-09.
- More borrowers took advantage of the increased Stafford loan limits of $2,000 which took effect on July 1, 2008
- This likely reduced demand for private loans while increasing federal loan volumes.
Look for results from the SLA Flash Survey on FFEL and Direct Lending Trends which will appear on the SLA blog on Wednesday evening.
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