The FSA Data Center has new federal loan data available for the first two quarters of the 2009-10 academic year. It shows that the FFEL program had 64.8% share of federal student loans disbursed for the first six months of this academic year (through December 31, 2009).
Here are the total loans disbursed through the Stafford, PLUS and Grad PLUS programs over the last six months ending December 31, 2009 (in millions of dollars):
FFEL | DL | TOTALS | |
Stafford (sub.) | $9,299 | $5,070 | $14,368 |
Stafford (unsub.) | $11,557 | $5,926 | $17,483 |
Parent PLUS | $2,072 | $1,849 | $3,921 |
Grad PLUS | $1,582 | $463 | $2,045 |
TOTALS |
$24,509 | $13,308 | $37,818 |
Share of Total | 64.8% | 35.2% |
So, what percentage of these FFEL loans have been sold to the Department through the ECASLA Loan Purchase or Loan Participation programs?
According to the latest figures, as of December 29, 2009, $15.8 billion was purchased through the Loan Participation program and about $400 million through the Loan Purchase program for a total of $16.2 billion or about 67% of loans disbursed by FFEL lenders (note there may be some redundancy between these two figures). So, overall the Department through Direct Lending and through the ECASLA financing programs are funding about $29.5 billion or 78% of total federal loans disbursed through the first six months of the academic year.
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The first quarter figures (through September 30, 2009) have been adjusted by FSA with FFEL now having a 62.4% share and DL having 37.6% share of federal loan originations. Earlier, SLA Blog had reported 58%/42% share for FFEL and DL respectively based on the figures posted at that time.
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I went back and reran the figures for Q1 given the large adjustments made by FSA to the quarter (adjustments are made for eight quarters after data is initially released) and found that loan growth on year-over-year basis in this seasonally strong quarter was up 24.1%, which continues the double-digit growth trend from 2008-09 (the College Board reported federal loan growth of 15%). Rather than have your eyes gloss over all the figures below, here are the highlights (all figures in millions of dollars):
- For the first quarter (September 2009), DL loan disbursements grew by 59.3% and FFEL by 9.4%, so yes, FFEL disbursements continued to grow despite their loss of market share.
- Of the federal loan programs, Grad PLUS grew fastest with 39.9% on year-over-year basis while each of the other loan programs grew in excess of 20%.
- Interestingly, DL's share of Parent PLUS loans is 48%. This shouldn't surprise since as posted earlier, FFEL lenders have more stingent credit criteria for these loans resulting in a rejection rate twice as high as Direct Lending.
Year over Year Growth | FFEL |
DL |
TOTALS |
Stafford (sub.) | 7.3% | 52.8% | 21.0% |
Stafford (unsub.) | 11.1% | 61.3% | 25.5% |
Parent PLUS | 0.2% | 55.8% | 20.9% |
Grad PLUS | 23.8% | 146.2% | 39.9% |
TOTALS | 9.4% | 59.3% | 24.1% |
2009-10: First Quarter | FFEL | DL | TOTALS |
Stafford (sub.) | $6,593.0 | $4,040.4 | $10,633.4 |
Stafford (unsub.) | $8,114.2 | $4,721.4 | $12,835.6 |
Parent PLUS | $1,633.5 | $1,506.8 | $3,140.2 |
Grad PLUS | $1,356.0 | $408.8 | $1,764.8 |
TOTALS | $17,696.6 | $10,677.3 | $28,374.0 |
Share of Total | 62.4% | 37.6% | |
2008-09: First Quarter | FFEL | DL | TOTALS |
Stafford (sub.) | $6,141.7 | $2,643.6 | $8,785.3 |
Stafford (unsub.) | $7,301.0 | $2,926.2 | $10,227.2 |
Parent PLUS | $1,630.8 | $966.8 | $2,597.6 |
Grad PLUS | $1,095.8 | $166.0 | $1,261.8 |
TOTALS | $16,169.3 | $6,702.6 | $22,871.9 |
Share of Total | 70.7% | 29.3% |
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Meanwhile a Chronicle of HIgher Education article "Nearly all colleges moving toward direct lending, says Department" reported that:
"The yearlong deliberation in Congress over whether to end the bank-based system of distributing federally subsidized student loans may be getting largely resolved on its own. According to new figures from the U.S. Education Department, colleges that account for 96 percent of all federal student loans are now either currently participating in the department's direct-lending system or "actively taking steps to prepare to participate in" the program."
This should come as little surprise to readers who might recall this SLA November 2009 flash survey, which found that only 8% of survey participants indicating that they would wait until legislation passed before preparing for the transition to DL. Of course, preparing and committing are not the same, and as this post indicated, we're getting to crunch time now. Let's hope that students aren't harmed by this congressional delay in addressing student aid reform bills.
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