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Fordham Offers Students a Choice For Loans

Students with loans have a choice at Fordham University—they can borrow from the federal government or they can borrow from the private banking industry. However, the choice may not be around for long.

According to a Feb. 4 article in the New York Times, “Lobbying Imperils Overhaul of Student Loans,” the recent election of Republican Scott Brown to the senate may cause a riff in President Barack Obama’s promise to federalize all student loans.

In his State of the Union address, Obama outlined a plan that would end private subsidies and give the savings back to the students. Students would receive more grants, and those that go into public service would have their loans forgiven. Families with loans would be given a $10,000 tax credit, and educational programs would be expanded. 

The lobbyists from private lenders like Sallie Mae are arguing that students will have little to no guidance and will default on their loans more often. If the bill passes, the private lending industry stands to lose $22 billion in loans it generated last year, as well as 35,000 jobs.

According to Peter Stace, the vice president of enrollment at Fordham University, a lot depends on how the legislature structures an exclusive direct lending program.

“One of the benefits that people appreciate from our program now is the ability to have a choice… we have a variety of programs. If one lender doesn’t offer a choice, you’re stuck,” Stace said. “From my perspective, competition is a good thing.”

Stace was quick to point out that the banks have had a good deal. They are guaranteed rates from student loans and are at little risk for loss.

“The way that program is regulated leaves a lot to be desired,” Stace said. “Those are the considerations that need to go into how exclusive direct lending is orchestrated.”

-Ashley Wennersherron, Editor and  Chief

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