Student Lending ... Did I Hear Optimism?

Brett Lief, President of NCHELP, provided the Industry Update this morning entitled the New World of Student Lending.  After months (or has it been years) of pessimistic news regarding the student loan industry, Brett’s presentation contained a bit of optimism.  The possibility of a bill being introduced in Congress by the end of the week to extend ECASLA, and thus FFEL was the highlight of the session.

 

Brett admitted that FFEL as we knew it in 2006 is gone and will not return but the door may not be closing as fast as we once thought.  As student lending legislation is continually being pushed back by the health care debate, Washington is becoming increasingly concerned about the affect on 2010 elections if fallout occurs with school’s mandatory conversion to Direct Lending.  As Brett mentioned, the proposed deadline for conversion of July 1, 2010 translates into a practical deadline of February due to financial aid packaging timelines which does not allow the remaining thousands of schools much time to convert. 

 

NCHELP is currently working on an alternative loan proposal which has garnered support from several democratic senators that would save and preserve school choice and services.  This proposal is less concerned about how lenders receive their funds and more about continuing the valuable services provided by FFEL.  Brett urged everyone to speak up as private individuals or through their professional associations.

 

The session closed with a poignant question ... are we looking at a delay of the inevitable and what signs should we look for that FFEL may survive in some form?  Brett responded that the first sign of hope for some kind of FFEL survival would be the passage of a bill to extend ECASLA so stay tuned.

Posted by: Kim Siwarski