Briefly: Sec. of Education urges Yale, other universities to adopt Direct Loan Program

Yale was one of nearly 3,000 U.S. colleges and universities to receive a letter Monday from Secretary of Education Ame Duncan urging them to adopt the Direct Loan Program for the 2010-’11 academic year. The letter follows the passage of the Student Aid and Fiscal Responsibility Act by the House of Representatives last month which will end federal subsidies and loan guarantees for private lenders. Director of Student Financial Services Caesar Storlazzi said that he has convened a fourth meeting to map out Yale’s response to the legislative changes, noting that protecting the financial well-being of Yale students is a top priority. Approximately 75 percent of colleges currently use the Federal Family Education Loan Program which disburses loans through private lenders. The Direct Loan Program was established in 1993 under the Student Loan Reform Act and provides loans from the Federal government directly to students and their families. SAFRA is currently awaiting approval by the Senate.

Comments

  • yale 2008

    Where does the Constitution permit this sort of behavior?

    Direct Loans from the Government?!?!

    This type of activity was implicity in the failure of Fannie & Freddie Mac.

    I hope students will realize that a student loan is FOREVER. You cannot default on a student loan like a mortgage or credit card debt. Not even after declaring bankrupcty.

    Do you really want to be that bound to the Feds?

  • yls’12

    PLEASE let us borrow directly from the gov’t, Yale. The interest rates are much lower when we don’t have to go through an outside company that spends tons of money on marketing and ridiculous mailings. Every month, I get a letter from my private Stafford lender telling me my loans won’t be due until I graduate. Thanks.

  • jb

    The stafford interest rates are exactly the same either thru direct lending or a private lender. Students and parents will see a lower interest rate on Plus loans thru direct however. But private lenders were for years able to offer zero fees vs direct charging students as much as 3%. Stafford fees are dropping but may reset after 2012. Fees are still in place on Plus loans. Thanks government.