2008 Woodie Awards
NU moves to reject private loans
Michele Richinick
Issue date: 3/20/08 Section: News
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Kennedy, a Massachusetts Democrat and chair of the Senate Committee on Health, Education, Labor and Pensions, heard testimony from the Department of Education and experts in student financial aid. They discussed the importance of financial aid and addressed recent instability in the credit market.
Despite the current challenges, the panels ensured students they will continue to have uninterrupted access to student loans to pay for college regardless of the strains in private credit markets.
Kennedy's address came as Northeastern announced plans to overturn its student loan process. Effective in July, Northeastern will reject private lending programs like Sallie Mae, and opt instead to borrow directly and exclusively from the US Department of Education, university officials said Monday.
Economic issues, including the recent subprime lending crisis and an upending student loan market, prompted the decision, Philomena Mantella, senior vice president for enrollment and student life, said in a statement.
Northeastern is the second college in the country to accept only federal loan money in lieu of third-party lending, following Pennsylvania State University, which announced similar plans earlier this month.
Overall, it was the administration's decision to move in this direction, said Seamus Harreys, dean of student financial services. The uncertainty in the financing market, the availability of a low-cost options and the simplicity of the direct loan program influenced the administrator's decision, he said. The direct loan program will remain one of the lowest costs going forward, he said.
To the 75 attendees in Raytheon Amphitheatre, Kennedy said young people are beginning to wonder how much debt they can live with.
"They aren't talking about books and teachers, they're talking about the jobs they have to maintain," Kennedy said.
Sara Martinez Tucker, US undersecretary of education, reassured the attendees that federal aid will be available to them in the upcoming school year despite uncertainties in private lending.
Loan programs have been suggested to more than 4,150 institutions, and there have been no encounters to date of lenders not being able to lend, Martinez Tucker said. Sixty of the schools have sent back positive responses, she said.
Viewing Comments 1 - 6 of 7
jamesedwards
Jim
posted 3/20/08 @ 3:57 AM EST
"Effective in July, Northeastern will reject private lending programs like Sallie Mae, and opt instead to borrow directly and exclusively from the US Department of Education, university officials said Monday. (Continued…)
Brian Dooley - Parent
posted 3/20/08 @ 10:00 AM EST
Perhaps if NEU would do more to contain expenses or award more of its funds destined for financial aid, students and parents would not have to borrow as much. (Continued…)
Martina
posted 3/20/08 @ 11:07 AM EST
To answer that, tuition will be rising approximately 5% for the upcoming school year.
Tom
posted 3/20/08 @ 12:38 PM EST
This has nothing to do with Loans that a student goes and gets on his own. NU is only moving federally funded loans (like Stafford, Perkins, etc.) to be directly funded by the government, rather than a middle-man like Sally Mae. (Continued…)
Brian Dooley - Parent
posted 3/20/08 @ 1:24 PM EST
If tuition is going up another 5% ($1575 increase for a total of 33,075) that will be an increase of $6575 (25%) in just 5 years. There has been inflation over the past 5 years but it has not been at a rate of 25%. (Continued…)
Marie
posted 3/20/08 @ 2:09 PM EST
In response to those complaining about the increase in tuition.
Yes, it is unfair that the cost of NEU is increasing, especially not at the same rate as inflation. (Continued…)
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