Submitted by jdubois on February 27, 2008 - 5:30pm.
I would be extremely carefull of blanket comments like: "There is no federal student loan crisis. There is zero danger that federal Stafford loans will not be available in the foreseeable future. Zero danger. "
Yes, schools do have the choice to switch over to the Direct Lending program but what happens when DL is overloaded? Like say, during tax season? I work for a FFELP company and just around this time of year dispersements, refunds and overpayments usually start getting delayed for as much as 90 to 120 days if they are coming from Direct Loans. All funds sent from Direct Loans come from the Department of Treasury so during this time of year everything starts to get back logged. If this occurs during current demand for Direct Loans what is going to happen when there is a mass immigration of schools switching over to DL loans...? Even a 90 day delay on a student's stafford loan dispersement can begin to start jepordizing current student's ability to stay enrolled and new students from starting on-time. What is going to happen when the delay on new loan dispersments begin to creep to 3-4 months, if not longer. The borrowers that need these loans the most are going to be the ones left out in the cold.I do not have any numbers confirming this but working in this industry for a number of years, I have heard horror stories from many students about the DL program in its current state. I shudder at the thought of DL dispersing all new stafford loans for students. NAF , you claim "The overriding mission of this blog is to support programs and policies that make post-secondary education more accessible, affordable, and rewarding for all", but your mission statement and your rants about the FFELP program are diametricly opposed.
"Zero Danger..."
I would be extremely carefull of blanket comments like: "There is no federal student loan crisis. There is zero danger that federal Stafford loans will not be available in the foreseeable future. Zero danger. "
Yes, schools do have the choice to switch over to the Direct Lending program but what happens when DL is overloaded? Like say, during tax season? I work for a FFELP company and just around this time of year dispersements, refunds and overpayments usually start getting delayed for as much as 90 to 120 days if they are coming from Direct Loans. All funds sent from Direct Loans come from the Department of Treasury so during this time of year everything starts to get back logged. If this occurs during current demand for Direct Loans what is going to happen when there is a mass immigration of schools switching over to DL loans...? Even a 90 day delay on a student's stafford loan dispersement can begin to start jepordizing current student's ability to stay enrolled and new students from starting on-time. What is going to happen when the delay on new loan dispersments begin to creep to 3-4 months, if not longer. The borrowers that need these loans the most are going to be the ones left out in the cold.I do not have any numbers confirming this but working in this industry for a number of years, I have heard horror stories from many students about the DL program in its current state. I shudder at the thought of DL dispersing all new stafford loans for students. NAF , you claim "The overriding mission of this blog is to support programs and policies that make post-secondary education more accessible, affordable, and rewarding for all", but your mission statement and your rants about the FFELP program are diametricly opposed.