Student Lending Analytics Blog

Discover Notes Growth of Student Loans in 1Q Conference Call

Sorry, missed this transcript for Discover's 1Q (ending February 28, 2009) conference call on March 19th.  Here was the excerpt relating to student loans, which provides some sense of their volume and penetration into the school channel:

NPR Interviews Tally Hart, Financial Aid Expert

NPR interviewed Tally Hart, former head of financial aid at Ohio State, who currently runs outreach program for lower income students.  Here are some excerpts:

• On the importance of Pell Grant as an entitlement:

When asked about recent changes in federal grants and loans, Hart says, "The No. 1 question that students always ask is, 'Will there be money for me to go to college?' The important part of the stimulus package is that it stabilizes and increases Pell Grants for these students, so we know it addresses the No. 1 concern about going on to college."

Parent PLUS And Grad PLUS Borrowers At FFELP Institutions UNITE! Demand Lower Interest Rates (And Save Over $200 Million!

While Congress is making technical corrections to the Higher Education Opportunity Act, why not fix the dIscrepancy in interest rates for FFELP Grad PLUS and Parent PLUS borrowers?  In case you weren't aware, if you are fortunate to attend a Direct Lending school, the statutory interest rates on Grad PLUS and Parent PLUS loans are both 7.9%, while rates on the SAME EXACT LOANS at a FFELP institution are 8.5%. 

What Are Students and FA Directors Saying About Sallie Mae's Smart Option Loan? (Update)

Sallie Mae recently announced a new repayment structure for their new private (or alternative) loan product, Smart Option.  In short, students would be required to make interest-only payments while in school and their repayment terms once out of school would range from 5-15 years.  I thought it would be interesting to see what students and financial aid administrators on college campuses are saying about it:

Apollo Group (University of Phoenix) Comments on Obama Proposal

Here are two takeaways from this filing:  Apollo Group (University of Phoenix) will be developoing capability to participate in DL for limited portion of federal student loans in 2009 and expect to be able to fully transition to DL by July 1, 2010 phaseout.  University of Phoenix is the largest borrower of FFELP loans; their students took out $3.76 billion of loans in 2007-08, based on Department of Education information. 

Here is the excerpt from their 10-Q filing today:

More on Geography of Federal Loan Programs

For those who enjoyed my earlier post of Geography on Federal Loan Programs, I thought I would slice and dice the data a few more ways.  Using 2007-08 federal loan data, that earlier post highlighted the states with highest concentration of FFEL and DL loans.  I thought it would be interesting to look at the data on a regional and sub-region basis.  

• In terms of regional strength, FFEL is strongest in the South with 83.3% of loans in that region being FFELP, although the West and Northeast are not far behind:

Update: Who's Going Direct Lending?

In our latest edition of "Who's Going Direct?", here is a list of schools cobbled together through various web searches that have indicated a move to Direct Lending for 2009-10.  The links will take you to web pages announcing this change.   Please note that this is not intended to be an exhaustive list. 

Two Approaches Being Considered for FAFSA Simplification

The Chronicle of Higher Education is reporting that the Department of Education in consultation with Treasury are considering two paths to FAFSA simplification:

Plan A:  Move to two factor aid formula:  adjusted gross income and family size.  "At its broadest, the plan would abolish the Fafsa and distribute aid strictly on the basis of adjusted gross income and family size, or another simple set of factors."

House Budget Committee Provides Recommendation on Future Structure of Federal Student Loans

The Chronicle of Higher Education is reporting that the House Budget Committee has released a report that doesn't seem as eager to eliminate FFELP.  Here is the key excerpt:

• Recommended that lawmakers “review options for the student-loan program that will maintain a role” for lenders, and to “look for ways to achieve savings that capitalize on current infrastructure and minimize the disruption to students and employees” of banks and other lenders.

Ability To Pay Full Price Increases Odds for College Admission

NY Times is reporting on the trend toward colleges admitting more students who can pay full freight.  Here are some excerpts:

• “If you are a student of means or ability, or both, there has never been a better year,” said Robert A. Sevier, an enrollment consultant to colleges.