Stafford Loan Transition to Direct Lending
Back in December I was in Nashville, TN for the Federal Student Aid Conference.
This event was hosted by the Department of Education and was a 5 day event aimed at updating all financial aid workers on changes, plans, and future updates within the federal student aid system.
If you have followed the major news from Washington these past few months, you have probably heard about our President’s proposal to transition all student loan lending under the Stafford and PLUS loan programs to the William D. Ford Direct Lending program. This will mark a significant change in how schools manage student loans. Many schools have already initiated this process and many more are planning on transitioning before the 2010-2011 academic year.
With all change comes some difficulties, but after hearing directly from the US Secretary of Education Arne Duncan, this transition will ensure student access to Stafford and PLUS loans into the future and allow all students to continue to progress towards your educational, career, and life goals.
This will mean however, that the Federal Family of Education lenders (FFEL) program will cease to exist. For many, this is cause for alarm. The FFEL program has been around for over 20 years and has served in the best interest of students during that time.
What can you do? If you have questions about this pending legislation or how it will affect you, contact your prospective schools. Ask which Stafford loan program they operate under! See what their views are on the issues! If you still have questions, contact your congressman! Contact your senator! Much of this legislation has already passed, but there are many sides to the same issue. Information is king!