With rising tuition prices, very few students attend college without some type of financial help. Government loans are one of the most common. However, they may not be as easy to obtain as they once were.
It seems that once again the federal government is taking action in the issue of education. Recently Senators Patty Murray of Washington and Christopher Dodd of Connecticut introduced a proposal that would stop lending institutions from picking and choosing which schools and students were eligible for loans.
The proposal came about after an article was published that stated that several lenders had stopped allowing federally guaranteed loans to certain community college and even some universities.
The senators feel that if a student Is eligible for a loan then he or she should not be denied based on the college (if it’s in the program), income, or number of years in school.
Senator Murray is concerned that denying these loans because of a certain school, program, or income level will close the door on too many opportunities for students.
One school, Eckerd College in St. Petersburg, Fl, was told by Wells Fargo that no more loans would be issued to its students by the bank. If the lenders cannot meet required profits from the student loans, they are simply saying “we’re out” and not issuing anymore loans.
Wells Fargo came back with the statement that the new laws of the eligibility of federal loans kept the bank from a decent rate of return.
Edward Kennedy of Massachusetts also supports the proposal. He recently urged that community colleges change from the federal guaranteed loan program and move to the federal direct loan program. In this program the students borrow money straight from the government. He says that colleges in the direct loan program will not have the worries about lender refusing their students loans.
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