“There is widespread uncertainty about what the full extent of the credit crunch and its impact on student borrowers will be. There is little evidence of the credit crunch limiting access to student loans,” Warren said. “The data serves as a warning flare.”
Another important finding from the survey was the dramatic decline in the Federal Family Education Loan Program. Nearly 60 percent of NAICU institutions have recently discovered that they are no longer providing FFELP loans.
The volatility of financial markets could disrupt access for an estimated 6.7 million students expected to apply for FFELP in the fall. Already, the Pennsylvania Higher Education Assistance Agency, which aids 500,000 students, shelved its FFELP.
“Two of our three preferred lenders that we had planned to utilize have dropped out of FFELP in the past few weeks. We have seen every single lender cut either front end or back benefits or even both,” the report indicated
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