March 21, 2008

Colleges Face Aid Reductions as Banks Retreat From School-as-Lender Program

By Paul Basken

Washington

Several financial companies that have formed partnerships with colleges in the "school as lender" program are cutting or terminating the scholarship payments they make to colleges, dealing another severe blow to a program already facing the possibility of elimination by Congress.

A number of lenders, including Sallie Mae, Nelnet, Citibank, and Student Loan Xpress, have notified their partner colleges in recent weeks about the reductions or terminations. Others, such as Edsouth,

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