[The following is a news release issued by STUDENT LENDING ANALYTICS.]
SLA Research Indicates Over 25% Of FFEL Schools Currently Considering Switch To Federal Direct Lending Program
Palo Alto, California - April 28, 2008 - Over 25% of colleges and universities currently in the Federal Family Education Loan (FFEL) program are considering switching (or have switched) to the Federal Direct Lending program. These results are based on a flash survey of 428 financial aid offices, conducted between April 24 and April 25th by Student Lending Analytics. SLA’s research found that among respondents currently in the FFEL program, 19.3% were "contemplating a move to Direct Lending" and that 5.8% had already decided to switch to Direct Lending for the 2008-09 school year.
Here were some other highlights from the survey:
A diverse group of educational institutions responded to the survey:
4 year private, non-profit colleges 37.9%
4 year public colleges 29.4%
2 year public colleges 22.9%
Proprietary educational institutions 3.7%
Other 6.1%
2 year FFEL public schools had the highest propensity to switch to Direct Lending
28.9% of this group is "contemplating a move to Direct Lending" (comparable figure for four year schools is 13.6%)
7.2% have made the decision to switch to Direct Lending for the 2008-09 school year (comparable figure for four year schools is 5.5%)
Proprietary school rates were higher with 42.9% "contemplating a move to Direct Lending" and 14.3% moving to Direct Lending for 2008-09 school year. Sample size was limited however at 14 FFEL respondents.
The three primary reasons identified by schools for their decision to switch (or to consider a switch) to Direct Lending were:
Frequent notifications of lenders dropping out or changing loan terms made lender selection difficult was noted by 39.5% of respondents in this category.
Concerns regarding the financial stability of lenders was selected by 33.7% of respondents as the primary reason for them to consider Direct Lending.
New regulations pertaining to lender lists was listed as the primary reason by 7.0% of respondents in this category
The three primary reasons that FFEL respondents gave for remaining in the FFEL program were:
Better borrower benefits for students was noted by 42.2% of respondents continuing in the FFEL program.
Enhanced customer service to financial aid office was noted by 16.4% of respondents continuing in the FFEL program
Insufficient time to make change to Direct Lending was noted by 11.3% of respondents continuing in the FFEL program
ABOUT STUDENT LENDING ANALYTICS. Student Lending Analytics provides research and advisory services to assist financial aid officers in their lender selection process. SLA utilizes financial models and proprietary surveys to provide a customized, objective and analytical approach to selecting the best student lenders. For additional information on Student Lending Analytics’ research and services, contact Tim Ranzetta (see contact information below) or visit www.studentlendinganalytics.com.
Posted 05/01/08 to www.NASFAA.org. Posting of press releases is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.
