Wheaton enters federal direct loan program
Wheaton has received approval to participate in the federally funded William D. Ford Federal Direct Loan Program. The college plans to implement this new program for the 2008-2009 academic year. The move will allow Wheaton students and their families to avoid the increasingly volatile market for Stafford and PLUS loans offered by third-party lenders.
Wheaton announced today that it has received approval to participate in the federally funded William D. Ford Federal Direct Loan Program. The college plans to implement this new program for the 2008-2009 academic year.
The college's switch from the Federal Family Education Loan Program (FFELP) to the Federal Direct Loan Program (DL) will ensure access to the federal Stafford and PLUS loans, allowing Wheaton students and their families to avoid the increasingly volatile market for Stafford and PLUS loans offered by third-party lenders.
"Our guiding principle in our federal loan policies has been to seek the maximum value for our students and their families," said President Ronald A. Crutcher. "With the ongoing uncertainty in the college loan industry, the best value we can offer students is to ensure access to federally subsidized loans in a clear and easy-to-navigate system. At this point, the direct loan program does that best."
The switch to a single-lender system for federal loans will also streamline the college's administrative processes, allowing Wheaton's student financial services staff to devote more time to counseling students and their families on financing options.
Wheaton's participation in the Federal Family Education Loan Program (FFELP), which allows private lenders to offer federally subsidized loans, has been aimed at allowing students to choose borrower benefits that lower the overall cost of the loans.. However, the ongoing credit crunch has eliminated most of those benefits and has created a confusing marketplace of constantly changing terms and lender uncertainty.
"We have always looked for ways to simplify the loan process. Recent regulatory guidance from the U.S. Department of Education about lender and guarantor choice in FFELP has made it more difficult for schools to streamline access to loan funds. Without the incentive to pass on significant cost savings to our students and parents, we have little reason to continue in FFELP," said Robin Randall, assistant vice president of Student Financial Services at Wheaton.
"Our counselors should be working with families on financing choices and with students on money management issues rather than lender selection and loan processing. As college cost continues to challenge the majority of our prospective and enrolled student families, now is the time to direct our resources more appropriately to help families address the challenges of college financing in the current economy, where the availability of credit-based loans has shrunk and become more expensive than ever before,"Randall said.
The college received approval to participate in the Direct Loan Program effective April 1, 2008. The college intends to implement the new program starting in the fall. Returning borrowers will receive instructions in early June for completing new Master Promissory Notes and Entrance Counseling in the Direct Loan program.
The Direct Loan Program funding comes from a single source, the Department of Education, and the loans can not be sold to other financial institutions, thus ensuring that promised benefits are not lost. The program offers several repayment methods and allows borrowers to switch repayment methods if needed.