New student loan bill protects financial aid
Bank of America Corp. announced on April 17 that it would be stopping its private student loan products but will continue to provide government-backed student loans.
The bank reported that its products comprised less than 15 percent of the total $6 billion in student loans the company provided in 2007.
The largest and most popular student lender, SLM Corp. or Sallie Mae, predicted that it might not be able to make profitable loans at this time and stated a first-quarter loss earlier this week.
"Under current conditions, however, loans can only be made at an economic loss. Reflecting this environment, the company is assessing how best to balance its resources and its mission to provide access for higher education," said Beth Guerard, a Sallie Mae spokesperson.
The University's status as a direct lending school will somewhat cushion the effects of Sallie Mae's poor performance.
According to Amoroso, the percentage of families at Hopkins who need to borrow money from a lender is very small; the majority of those students will use a direct-loan program under government funding.
"In our opinion, the least disruptive, most cost-effective, most controllable and quickest proposal to implement would be for the Department of Treasury's Federal Financing Bank to provide liquidity for federally guaranteed loans," Jack Remondi, executive vice president and chief financial officer of Sallie Mae, said in congressional testimony.
The bill, which was passed by a vote of 383 to 27 in the House, will not create additional costs for taxpayers.
Department of Education spokesperson Jane Glickman declined to comment, referring instead to a previously-released written statement.
In it was stated that "The administration is committed to ensuring that students and their parents have access to the Federal student aid they need to pay for college this fall."
The Department of Education is also making preparations for the Direct Loan and Lender-of-Last-Rest (LLR) programs to be enacted if they are necessary. H.R. 5715 would give authorization to the Secretary of Education to buy Federal Family Education Loans.
The bank reported that its products comprised less than 15 percent of the total $6 billion in student loans the company provided in 2007.
The largest and most popular student lender, SLM Corp. or Sallie Mae, predicted that it might not be able to make profitable loans at this time and stated a first-quarter loss earlier this week.
"Under current conditions, however, loans can only be made at an economic loss. Reflecting this environment, the company is assessing how best to balance its resources and its mission to provide access for higher education," said Beth Guerard, a Sallie Mae spokesperson.
The University's status as a direct lending school will somewhat cushion the effects of Sallie Mae's poor performance.
According to Amoroso, the percentage of families at Hopkins who need to borrow money from a lender is very small; the majority of those students will use a direct-loan program under government funding.
"In our opinion, the least disruptive, most cost-effective, most controllable and quickest proposal to implement would be for the Department of Treasury's Federal Financing Bank to provide liquidity for federally guaranteed loans," Jack Remondi, executive vice president and chief financial officer of Sallie Mae, said in congressional testimony.
The bill, which was passed by a vote of 383 to 27 in the House, will not create additional costs for taxpayers.
Department of Education spokesperson Jane Glickman declined to comment, referring instead to a previously-released written statement.
In it was stated that "The administration is committed to ensuring that students and their parents have access to the Federal student aid they need to pay for college this fall."
The Department of Education is also making preparations for the Direct Loan and Lender-of-Last-Rest (LLR) programs to be enacted if they are necessary. H.R. 5715 would give authorization to the Secretary of Education to buy Federal Family Education Loans.
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