You can't open a newspaper or turn on the evening news without hearing something about the student loan credit crunch. But is students’ access to loans really in jeopardy, and if so, what can be done to make sure students get the funding they need? NASFAA's White Paper - "The Student Loan Crunch" - is designed to introduce you to the origins of the 'crunch' and NASFAA’s recommendations and actions thus far.

In a letter to all NASFAA members yesterday, NASFAA President & CEO Dr. Phil Day said he and the Board of Directors are particularly concerned about community colleges and career schools in the FFEL program. Several lenders have indicated that they will not be lending to students at those institutions because they are deemed high credit risks.

"The actions of these lenders go against the spirit of the federal student aid programs," Day wrote. "A lender that receives federal subsidies and reimbursements on defaulted loans should not strike entire student populations simply based on their institution."

The NASFAA White Paper: The Student Loan Credit Crunch, shows what actions NASFAA has already taken to help ensure the continued availability of federal student loans. Injecting liquidity into the student loan market is only part of the solution. NASFAA will also be making new partnerships with Direct Loan schools to help FFELP schools that are interested in transitioning into the Direct Loan program. NASFAA is also advocating for increases in other forms of federal student aid as part its overarching strategy to ensure students have all the funds they need to meet their postsecondary goals this coming academic year.

"We have been actively engaged in this situation and will continue to do so until we are sure that every student, no matter where they attend, has access to low cost federal student loans," wrote Day.

Posted 04/30/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.