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"Some college administrators seem so distracted with fund raising, academic infighting, and community initiatives that they set up their emergency communications departments very poorly. Training is poor to nonexistent, secretaries are pressed into service with tremendous responsibilities for running 'notification systems' 24/7 and on weekends because no one else knows how to do it and the administration won’t pay for additional staff. Procedures are seat-of-the-pants and dependent on HIPPO (highest paid person’s opinion), except when something like Virginia Tech happens and there is some sort of scramble to do something different." --Donna
Most Colleges Avoid Risk Management, Report Says
New Allegations in Admissions Controversy at U. of Illinois Suggest Ex-Provost Played a Role
Linda P.B. Katehi, the incoming chancellor of the University of California at Davis, has insisted she knew nothing of the admission of politically connected applicants at Illinois.
Sonoma State U. Foundation May Lose $350,000 on Loan to Former Board Member
The foundation will be forced to issue fewer scholarships in the 2010-11 academic year because of a diminished endowment, a university official said.
Court Overturns $2-Million Verdict for Former Coach at U. of Louisiana-Lafayette
The coach, one of the few African-Americans in big-time college football, was fired after three losing seasons. He sued, saying he had been dismissed because of his race.
The notorious vermin have forced Colorado State University at Fort Collins to cancel its annual Great Sofa Roundup, which allows students to donate unwanted couches.
Water-Main Break Damages Library at University in St. Louis
Summer classes at Harris-Stowe State University resumed today, but the library remains closed.
College Suspends Student for Working in Gay Pornography | 58
President Obama's Visit to Notre Dame Carries Barely a Hint of Controversy That Preceded It | 58
Drug Sting Nabs 21 Students at U. of Illinois | 57
Faculty Members and Union Protest Staff Layoffs at Temple U. as 'Cruel' | 57
North Dakota Board's Vote Puts 'Fighting Sioux' Mascot on Thinner Ice | 57
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April 11, 2008
Sallie Mae to Quit Offering Federal Loan Consolidations
Washington — Sallie Mae, the nation’s largest student-loan company, is taking another step away from the government-backed student-loan business, further exacerbating the sense of crisis hanging over the industry.
Sallie Mae announced today in a letter to colleges that it would no longer offer consolidations under the federally guaranteed loan program. Students typically consolidate their loans after they graduate, combining loans from each of their years in college into a single loan to make it easier to manage when paying back the money. Until recent months, consolidations had been regarded as a highly profitable activity for loan companies because consolidation usually occurs as students enter years of repayment.
A series of loan companies, however, has been quitting the system of federally guaranteed student lending in recent months, blaming a combination of cuts in federal subsidy rates enacted last September by Congress and a credit crunch attributed to a surge in mortgage defaults.
Sallie Mae, in its letter today, reiterated that problem, saying that lenders responsible for more than 16 percent of all student loans last year have now announced their departure from the government-backed system.
“As a result,” Sallie Mae said in the letter, signed by its president, Charles E. Andrews, and its executive vice president, Barry Feierstein, “loan demand will significantly exceed lender supply for the upcoming academic year.”
As part of preparations for the possibility that some students might not be able to find willing lenders this fall, Education Secretary Margaret Spellings met here today with representatives of guarantee agencies — a group of 35 nonprofit entities that use federal money to repay student-loan companies when borrowers default — to discuss plans for lending federal money directly to students, on an emergency basis if necessary.
In addition to announcing the termination of its consolidation-loan business, Sallie Mae told colleges that it would no longer pay for students the federally mandated origination fee on government-backed loans. “With the large number of lenders exiting the program,” Mr. Andrews and Mr. Feierstein wrote, ”Sallie Mae cannot justify subsidizing some students at the expense of others who may be unable to get funds for college.” —Paul Basken
Posted on Friday April 11, 2008 | Permalink |Comments
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The difference between Sallie Mae’s 16% figure and my 13% figure has to do with School as Lender schools. 47 such schools have lost their lender partners and need to find a new partner, which will be very difficult in the current environment. However, since only one school as lender school has announced its exit from the student loan program, I am not yet including them in my tally of loan program suspensions.
— Mark Kantrowitz Apr 14, 09:17 AM #
While I appreciate Sallie Mae’s heroic efforts to make sure there is enough loan money to go around, I do wish to point out that they had previously formally announced that they would pay Origination Fees on behalf of borrowers for the 2008-09 academic year. Borrowers learned about this benefit on our school website and on the Sallie Mae information site linked from our website. Now these students have a right to feel angry and betrayed. Sallie Mae, please continue to demonstrate your commitment to students by sending a formal apology to all affected borrowers.
— Patrick Gorman Apr 14, 11:16 AM #
Enough money to go around for whom? Students or Sallie Mae executives’ bonuses?
Remember that Sallie Mae pulled this stunt with consolidation loans a few years back when something else didn’t go their way and they felt the need to hold their breath and stamp their feet until they got what they wanted. The current action we’re seeing is essentially lenders going on strike, trying to get the corporate welfare subsidy cuts rolled back. So there’s less money to be made by banks…but when banks’ profits become the primary purpose of the student loan program?
— DS Apr 14, 03:18 PM #