This feature contains responses from industry professionals to questions posed by Business First.
Evelyn Levino - Vice president for students, Franklin University
The current mortgage meltdown has created a secondary adversity – fewer student loan funding options. Fewer loan options create volatility in what was previously a stable environment. In my 25 years in higher education, I have never before witnessed such abrupt participation withdrawals by student loan lenders.
As a result of losing timely access to sufficient capital to finance lending activities, some lenders have simply stopped processing loans with no notice to students or schools. Some lenders have been forced to move away from the less profitable Stafford loans, using them instead as “loss leaders.”
This move allows lenders to provide loans only to students at schools with a high volume of more profitable alternative loans, thereby decreasing funding choices. Consequently, some schools have expanded their preferred lender list beyond the required three to minimize the impact of additional lenders pulling out of the market.
Catherine Meyers - Title: Relationship manager, Key Bank
Source
Evelyn Levino - Vice president for students, Franklin University
The current mortgage meltdown has created a secondary adversity – fewer student loan funding options. Fewer loan options create volatility in what was previously a stable environment. In my 25 years in higher education, I have never before witnessed such abrupt participation withdrawals by student loan lenders.
As a result of losing timely access to sufficient capital to finance lending activities, some lenders have simply stopped processing loans with no notice to students or schools. Some lenders have been forced to move away from the less profitable Stafford loans, using them instead as “loss leaders.”
This move allows lenders to provide loans only to students at schools with a high volume of more profitable alternative loans, thereby decreasing funding choices. Consequently, some schools have expanded their preferred lender list beyond the required three to minimize the impact of additional lenders pulling out of the market.
Catherine Meyers - Title: Relationship manager, Key Bank
Source
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