Student Financial Aid News

From Inside Higher Ed:

U.S. Bank, the sixth largest provider of federally guaranteed student loans, has told its customers that it will stop doing so after this fall, Student Lending Analytics reported Wednesday. U.S. Bank told college officials that it would end its activities in the Federal Family Education Loan Program by September 25. U.S. Bank does not service the loans it makes, and so would have no role in the Obama administration’s proposed plan to end the guaranteed student loan program, and relatively little role even in the alternative setup proposed this week by a group of loan providers hoping to sustain elements of the lender-based program.

Commentary

Expect more banks to withdraw from federal student lending as the Obama Administration gets closer to its goals of eliminating the FFEL program. Students expecting to have the same level of choice even as early as this fall for federal student loans may not find what they’re looking for.

From around the Web and Inside Higher Ed:

Dr. Philip Day, the president of NASFAA, the national association that represents financial aid administrators, was indicted Wednesday on a series of felony charges related to allegations from his previous job, as chancellor of the City College of San Francisco. The charges say that Day diverted college funds illegally to political campaigns that supported the college, such as bond measures. Such spending, if it took place, would violate California law. According to that newspaper, Day could face nine years in prison and fines of $300,000 if convicted on all charges.

There could of course never be a good time for the president of the National Association of Student Financial Aid Administrators to be indicted, but it would be hard to think of a worse time for the organization. Dramatic reforms in student aid and loan programs are currently being considered by the Obama administration and members of Congress. And the association’s annual meeting starts in San Antonio on Sunday.

Commentary

Not much to say on this one, since I don’t plan to review the case itself. I do hope NASFAA is able to continue its mission uninterrupted, and wish them all success as an organization that advocates for college affordability. It does not bode well for the industry overall, however, for a prominent leader to be indicted. Let’s hope this storm can be weathered as well as past ones.

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