Spring Break
Banks more selective in student loan distribution
Denis Jimenez
Issue date: 11/12/08 Section: College News
U-WIRE_While some Internet lending companies are beginning to consider a student's major as a factor in whether to grant a loan, larger institutions have not adopted this trend yet - though many have more strict guidelines for loans or have stopped offering them.
The private student loans marketplace Web site fynanz.com considers a student's major when deciding whether to grant the requested loan. The idea is that a student pursuing a higher-paying job field would be better able to pay off a loan after graduation than someone in a typically lower-paying field.
Some economists think more should be considered when giving students loans, said Kevin Bruns, the executive director of America's Student Loan Providers.
"The situation is poor for the private side of student loans," he said.
The government increased availability of financial aid by passing the Ensuring Continued Access to Student Loans Act of 2008 in May. The act increased the cap for recipients of federal unsubsidized student loans by $2,000, Bruns said.
The Federal Family Education Loan Program lends an average of $100 million a year to Ohio University students, said Craig Cornell, the vice provost for enrollment management. Private institutions, which are reluctant to lend since the credit crisis, made $32 million in loans to OU students last year, Cornell said.
Government loans are increasingly important as private loans and other types of funding become harder to find.
"A lot of endowed scholarships have returns that are not really what they used to be because of the financial markets," Sondra Williams, director of student financial aid at OU, said.
Fewer scholarships have been awarded because of losses in the stock market, Williams said. Many endowed scholarships are invested in financial markets to create more scholarships.
"It's assumed that as loans become harder to get, enrollment will decrease," Bruns said.
Since June, four private companies, including KeyBank and CampusDoor, have stopped offering student loans for next year, Williams said.
The private student loans marketplace Web site fynanz.com considers a student's major when deciding whether to grant the requested loan. The idea is that a student pursuing a higher-paying job field would be better able to pay off a loan after graduation than someone in a typically lower-paying field.
Some economists think more should be considered when giving students loans, said Kevin Bruns, the executive director of America's Student Loan Providers.
"The situation is poor for the private side of student loans," he said.
The government increased availability of financial aid by passing the Ensuring Continued Access to Student Loans Act of 2008 in May. The act increased the cap for recipients of federal unsubsidized student loans by $2,000, Bruns said.
The Federal Family Education Loan Program lends an average of $100 million a year to Ohio University students, said Craig Cornell, the vice provost for enrollment management. Private institutions, which are reluctant to lend since the credit crisis, made $32 million in loans to OU students last year, Cornell said.
Government loans are increasingly important as private loans and other types of funding become harder to find.
"A lot of endowed scholarships have returns that are not really what they used to be because of the financial markets," Sondra Williams, director of student financial aid at OU, said.
Fewer scholarships have been awarded because of losses in the stock market, Williams said. Many endowed scholarships are invested in financial markets to create more scholarships.
"It's assumed that as loans become harder to get, enrollment will decrease," Bruns said.
Since June, four private companies, including KeyBank and CampusDoor, have stopped offering student loans for next year, Williams said.
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