College President R. Barbara Gitenstein recently stated in an email to the Campus Community:

“It is impossible to be unaware of the troubled state of the global economy...Uncertainty in all arenas of the economy have made all of us worry about the fiscal health of The College of New Jersey.”

Though President Gitenstein was not directly speaking of the student loan industry, it has been a concern for many students and families here at The College. So far, the credit crunch in the student loan market has mostly affected community colleges and for-profit trade schools that participate in the Federal Family Education Loan Program (FFELP).  Even though TCNJ does participate in FFELP, the good news is that any reported shortage of student loans throughout the nation has not been a problem here at The College.

FFELP Loans: Include Subsidized and Unsubsidized Stafford, Parent PLUS, and Graduate PLUS Loans

• Steve Tessitore, a Direct Lending/FFELP Loan lender liaison from the Department of Education has gone on record to say that “all FFELP loans will be funded.”
• HR 5715, a bill passed by Congress and signed into law by President Bush gave the Department of Education the authority to extend the period of time for lenders to sell loans to the Department through the 2009-2010 academic year, guaranteeing funding for the FFELP program during this time.
• America’s Student Loan Providers (ASLP), a coalition of private, non-profit and state-based lenders and guaranty agencies has gone on record that they are committed to ensure that all eligible students have a reliable source of funding for student loans.
• $700 Billion Financial Rescue Package and related programs should begin stabilizing FFELP capital markets.
• To date, TCNJ has disbursed FFELP Loans for the 2008-2009 academic year from Sallie Mae, Citibank, StuFund, Chase, Citizens, PNC Bank, Wachovia, Nellie Mae, Discover Financial, Bank of America, and several other financial institutions.

Alternative/Private Student Loans

• Michelle Nealy states it best in her article “Despite Credit Crunch, Loans Still Available” dated October 10, 2008 for Diverse: Issues in Higher Education; “Despite the economic downturn and instability of the credit markets, college students are acquiring college loans, although the qualifying criterion has become more stringent.” (http://diverseeducation.com/artman/publish/article_11806.shtml)
• Since the beginning of the credit crisis 137 lenders have stopped funding federal student loans and 33 have dropped private programs. However since May, the Department of Education has spent some $5 billion buying loans in an effort to reignite private student lending.
• To date TCNJ has disbursed alternative loans for the 2008-2009 academic year from HESAA (NJ Class), Sallie Mae, Citibank, Chase, Key Bank, PNC Bank, Discover Financial, Campus Door, Wachovia, and Wells Fargo.

New Jersey Class Loan

• Andre Maglione of the New Jersey Higher Education Student Assistance Authority (HESAA) states that the bond sale that generated the capital to fund the NJ Class Loan totaled over $300 million and that there is very little chance that these loans won’t be funded.
• Currently we have 948 students at TCNJ who have taken advantage of the NJ Class loan for the 2008-2009 academic year.

Sallie Mae Signature Loan

• Currently we have 174 students at TCNJ who have taken advantage of the Signature Loan offered by Sallie Mae for the 2008-2009 academic year.
• Sallie Mae has announced recently that “Because of the continuing turmoil and uncertainty in the credit markets, Sallie Mae has made the difficult decision to tighten the underwriting on all our private student loan products,” including the Signature Loan. Moving forward this will only affect those who do not already have their application in for the academic year.