Blame the media
BY HOLLY FOX, MEDILL NEWS SERVICE
Credit crunch or echo chamber? That’s what Inside Higher Ed asked today about the supposed student loan crunch. The Wall Street Journal worried about it on Monday and I wrote about it last week. A hefty 90 percent of financial aid counselors surveyed by the National Association of Student Financial Aid Administrators were either somewhat or very concerned about the student loan crunch and yet not a single student has yet reported that they were unable to get the loans they needed.
The author of the Inside Higher Ed piece argues that the sky hasn’t fallen yet, despite the regular appearance of articles where “the overpowering impression is that students and families are reeling because they’ve found themselves unable to ensure loan funds, and that colleges are finding themselves with loads of nonpaying students.”
Neither of those scenarios is true. What is true?
- Fewer banks are offering private student loans. Wachovia Corp. pulled out of that business last week.
- Universities are switching to Federal Direct Lending because some banks are dropping out of the federally subsidized and federally guaranteed Federal Family Education Loan Program.
- Legislation that seeks to avert a student loan crisis has been passed and signed. It allows the government to buy back loans from banks at the end of the year.
The Inside Higher Ed article warns, however, that if the sky were to fall, it would be this month, as tuition bills for the coming academic year start arriving in students’ and parents’ mail boxes soon.
Tags: credit crunch, financial aid, Inside Higher Ed, student loans, Wachovia Corp.
