College Board released their 2009 Trends in Student Aid today. I will be digesting the report over the next week and posting analyses. Having assisted the College Board with their analysis of the private student loan market, it didn't come as a complete surprise that they reported a 50% decline in private student loans from $23.8 billion in 2007-08 to $11.9 billion in 2008-09. Private student loans from the private sector declined by 51% from $22.3 billion to $11.0 billion, with state sponsored programs (such as Massachusett's MEFA, New Jersey's NJCLASS and Minnesota's SELF program) dropping 39%, from $1.5 billion to $900 million over the past year. Note that the College Board adjusted their earlier 07-08 private loan preliminary estimates upwards, from $19.1 billion to $22.3 billion, which accentuated this decline of $11.9 billion.
It is not difficult to rattle off the reasons for the decline; weak secondary markets which had previously fueled the rapid growth of private loans, continued increases in loan chargeoffs and delinquencies and a lack of capital (or a lack of willingness of bank executives to commit capital to this business). This reduction in private loan capacity was met by increases in federal loans, which grew by 15% to $84.0 billion, according to the College Board. This constitutes an $11 billion increase. Unsubsidized Stafford loans saw the sharpest increase, jumping by 33.8% to $38.9 billion, driven by increases in unsub. Stafford loan limits instituted in July of 2008.
What might surprise many folks is that even after a 50% decline in volumes for 2008-09, SLA projects that the market for private student loans will continue to contract in 2009-10 based on recent updates from two of the largest lenders of private student loans, Sallie Mae's Smart Option (25% below their "modest expectations") and Citibank (47% decline in private loan originations). A $5 billion expansion of the Perkins Loan program, as envisioned by student aid reform proposals, could continue to crimp growth prospects in the private loan market into 2010-11.
Do colleges care if you have transferred from a 4-year college to a community college?
I am a sophomore at 4-year college right now and don't like the school. I want to fininsh off this coming semester so I can transfer to a community college since it's cheaper. I plan on taking the next semester at a cc. And then when I become a junior, I'm going to another 4-year college to graduate. Will the colleges I will be applying next year wonder why I started out as a student at a 4-year college but then decided to transfer over to a community colleges?
Posted by: sildenafil citrate | April 16, 2010 at 01:44 PM