Student Loan News

1/24/08

Career College Association Fears For Borrowers

The association representing for-profit colleges expressed growing alarm that many of its students will no longer be able to pay for their educations, especially in the wake of announcements that student lenders have backed away from serving subprime borrowers.

The Career College Association said a survey of member institutions found that more than one-third of respondents said lenders have stopped offering private loans to students at their schools and two-thirds were worried about the ability of students to obtain loans, whether FFEL (Federal Family Education Loan), Direct, or private. The CCA web-based survey results, conducted this month, reflect responses from more than 60 education corporations and institutions educating tens of thousands of students.

“Access to private lending sources is absolutely critical for many working adults to be able to bridge the gap between federal grant and loan program limits and actual tuition costs,” Harris N. Miller, president of the CCA, said in a statement. “Our member institutions tell us that many lenders have stopped subprime private lending and may stop private lending altogether. Their retreat may leave many students unable to finance the balance of their educations.”

CCA said turmoil in the credit markets coupled with the College Cost Reduction and Access Act, which stripped more than $22 billion in federal subsidies from lenders and guarantors, has created financial problems for lenders, and in turn, has put its students at risk. Students at career schools, also known as for-profit or proprietary schools, typically come from different walks of life than undergraduates at traditional colleges. Career students are often working adults, often financially struggling and with low credit scores that put them in the subprime category.

The association also strongly suggested that federal action is needed to increase funding for students. It called for, among other ideas, a greater increase in the Pell Grant and a possible partial reversal of the subsidy cuts to student lenders.

“We are not at the crisis stage yet,” Miller said, “but bold action is needed to keep the lenders’ retreat from turning into a rout and taking with it the last, best chance of many students to earn a college degree.”

- Provided from Higher Education Washington, Inc

01/02/2008

Ed Announces Dates For Student Loan Rulemaking

The Department of Education has announced plans to begin the negotiated rulemaking process for student financial aid programs authorized by the Higher Education Act. The Department has selected federal negotiators and issued invitations to those non-federal negotiators selected to participate. The first session of rulemaking is scheduled for January 14 to January 16, from 9 a.m. to 5 p.m. each day. The second session is scheduled for February 4 and 5, from 9 a.m. to 5 p.m. and February 6, from 9 a.m. to noon. The third session is scheduled for March 4 to March 6, from 9 a.m. to 5 p.m. each day. The site for the meetings is the Department’s office of Postsecondary Education at 1990 K St. N.W., Washington, D.C.

- Provided from Higher Education Washington, Inc

12/27/2007

Ed Extends Heroes Act Waivers

On December 26th, ED published a notice extending the waivers and modifications of statutory and regulatory provisions pursuant to the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, Public Law 108-76. Under the Act, the Secretary of Education is authorized to waive provisions of Title IV, as appropriate to assist to assist individuals who are applicants and recipients of student financial assistance under Title IV of the Higher Education Act of 1965and who are serving on active military duty during a war or other military operation or national emergency; are performing qualifying National Guard duty during a war or other military operation or national emergency; reside or are employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency; or suffered direct economic hardship as a direct result of a war or other military operation or national emergency, as determined by the Secretary. See:

- Provided from Higher Education Washington, Inc

12/20/2007

Students Plead Guilty To Paying For Grades

Two former Touro College undergraduates pleaded guilty to avoid jail time last week in a charge related to paying school officials to falsify their grades and transcripts. Uzi Azizov, 22, and Boris Yakubov, 25, pleaded guilty to a misdemeanor state charge of falsifying business records. Each was sentenced to seven days of community service and fined $1,000. Ten people were indicted by a grand jury this past year for planning to use the city college’s computer system to change grades and create fake degrees in exchange for money.

Azizov’s grade point average jumped to 3.63 from 1.23 because of the transcript changes made by a school official. Meanwhile, Yakubov purchased a fake transcript which stated he had earned a master’s degree from Touro’s Graduate School of Education and Psychology. He admitted he paid a college official to falsify his records. The indicted school officials, which include Touro’s former director of admissions, the former director of the school’s computer center and three public school teachers, created or altered records for at least 50 people since January, said District Attorney Robert Morgenthau. They charged fees of $3,000 to $25,000 for better or deleted grades and for bachelor’s and master’s degrees.

- Provided from Higher Education Washington, Inc