SLA Survey Finds 35.7% of FFELP Respondents Considering or Committed to Direct Lending for 2009-10

Here are the complete survey results:  Download FFELvDirectV2.pdf

Here is an article from the Chronicle of Higher Education summarizing the results. 

Here is a summary of the survey results:

More than 1 in 3 FFELP respondents to a recent SLA survey indicated that they are considering a switch to Direct Lending (29.4%) or have already committed to making a change (6.3%) for the 2009-10 academic year.  These results are based on a flash survey of 416 financial aid administrators conducted by Student Lending Analytics between October 21 and October 24, 2008. 

• Four year public and private institutions in FFELP have a similar propensity to consider switching to Direct Lending, with 31.2% of four-year public and 31.8% of private institutions considering such a move. 
  • Meanwhile, roughly one in five (22.2%) of the two-year publics in FFELP are considering a move to Direct Lending.   

• The most important reasons cited by FFELP institutions considering (or switching to) Direct Lending are (rating of 5.0 indicates Most Important factor):   
  • Concerns about financial strength of lenders (Rating of 4.38)          
  • Borrower confusion (4.13)
  • Issues with customer service/loan processing (3.95)
  • Time required to maintain lender lists (3.73)
  • Dwindling borrower benefits (3.60)

• 58% of those FFELP schools considering a move to Direct Lending indicated that they would likely make a decision by January 31, 2009 to ensure adequate time to implement it for the 2009-10 academic year.   

• For the 2/3 of FFELP institutions who remain committed to FFELP, their primary reasons for staying with the program include:
  • Customer service (Rating of 4.56)
  • Borrower choice (4.25)
  • Borrower benefits (3.92)
  • Concerns over the systems conversion required to implement DL (3.80)
  • Direct Lending reconciliation process (3.48)