The results of a survey conducted by the National Association of Independent Colleges and Universities indicate that at least a few students at many private colleges and universities were unable to obtain enough private loan funding to pay their fall tuition. The survey also indicates that the credit crunch may have steered a number of students away from private schools.
More than 500 NAICU member schools responded to the survey, which asked questions about the availability of Stafford loans made through the Federal Family Education Loan Program (FFELP), the availability of private student loans, and unanticipated enrollment shifts. Eighty-five percent of schools reported that they had lost at least one FFELP lender, but the vast majority had no difficulty replacing these lenders. Additionally, most colleges lost at least one private lender, with 27 percent of those schools reporting that students had some difficulty finding a replacement lender.
More than half of colleges surveyed reported they had at least some students who were unable to secure private loan funds for the current semester, and 45 percent of schools reported students changing their enrollment status due to financial concerns. Eighteen percent of colleges surveyed reported fewer returning students and 19 percent reported a smaller freshman class than anticipated. While most colleges reported no significant changes in enrollment, it appears some private college students (who are typically the most likely group to qualify for student loans) are being forced to alter their educational plans due to the current economic situation.
Three quarters of private colleges surveyed also reported increased financial need among their student populations. Coupled with the rise in FAFSA files across the board and preliminary reports of more demand for financial aid coming from state universities and community colleges, it appears competition is getting stiffer for need-based student financial aid. This is just one more reason for students to ramp up their scholarship search and find money for college as soon as possible.
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