University Business - May 2008 - (Page 16)

BEHIND the NEWS Finding Fixes for a Possible Student Loan Crisis Rabbits, Rabbits Everywhere TO SAY THE UNIVERSITY OF VICTORIA (British Columbia) has something of a rabbit problem is an understatement. The rabbits are everywhere. They’ve been there since the 1980s—domestic pets abandoned by their owners, according to some—and they’ve done what comes naturally: multiply. Females can deliver litters of up to seven offspring at a time, and they can do it four or five times a year. Their offspring can begin reproducing within four months. The rabbit has even become an unofficial school mascot. Some people think the animals are cute and adorable, but to many in the UVic administration, they are pests. Their population is growing too fast for the 346-acre campus, wreaking havoc in campus gardens and damaging athletic fields. Maintenance workers routinely remove dozens of deceased rabbits a month. No one wants to kill the bunnies—that would be a public relations nightmare. So administrators are playing it by ear, hoping someone can come up with a humane way to reduce the rabbit population. A rabbit roundup, after which the males and females would be segregated to separate pens to live peacefully without mating, is one idea. But this hare-splitting scheme involves capturing what may be thousands of the rascally rabbits. “I’m not sure how realistic that is,” notes Director of Campus Planning and Sustainability Neil Connelly. Another thought is to introduce a form of bunny birth control into the rabbits’ food so that the population naturally culls itself. Until someone comes up with a way to make the hare line recede, UVic students and administrators will just have to hope for a hoppy ending. —Tim Goral U STUDENT LOANS ARE NECESSARY to make college a reality for many families. Now lawmakers and financial aid experts are pushing for safeguards to ensure that the federal student loan process won’t be shaken by the nation’s credit crunch. This worry has been magnified by significant changes in the relationships between higher ed institutions, lenders, and the Federal Family Education Loan Program (FFELP). Currently, more than 45 lenders have exited FFELP in all or part, including companies such as Washington Mutual, Sovereign Bancorp, College Loan Corp., and NorthStar Education Finance. Lenders that have chosen to remain in the student loan business are imposing stricter credit requirements or co-signing for private student loans. For federal loans, some lenders have stopped lending to or marketing to students at schools with cohort default rates above 10 percent. A survey of National Association of Independent Colleges and Universities members about the credit crunch’s impact on student loans (www.naicu.edu/studentloan survey), conducted in March, cites a significant number of private IHEs reporting reductions in student loan availability and borrower benefits. Among 211 member institutions who received information from “preferred” lenders on making loans through FFELP for the 2008-2009 academic year, 68 percent said that one or more of their lenders are cutting borrower benefits on FFELP loans; 57 percent said they are no longer providing these loans. As of mid-April, about 60 IHEs had switched from FFELP to direct lending, allowing students to borrow from the federal government through their colleges, eliminating involvement from private lenders. These range from private liberal arts-based schools such as Augustana College (Ill.), to Penn State is one of about 60 institutions that has switched to federal direct lending. private, research-centered institutions such as Northeastern University (Mass.), to large state institutions such as The Pennsylvania State University. Philip Day, president and CEO of the National Association of Financial Aid Administrators, says it appears the reason institutions are going in this direction is that “they want to take measures into their own hands. They don’t like the unsettled nature of the private sector marketplace.” Mark Kantrowitz, publisher of FinAid (www.finaid.org), a student financial aid website, agrees. “It certainly shows that some schools are worried about the stability of FFELP.” Calls for a response from the federal government have been loud and quick. In April, the House Education and Labor Committee approved the Ensuring Continued Access to Student Loans Act of 2008, which offers new protections to prevent uninterrupted access to federal college loans. It would give the U.S. Secretary of Education the authority to advance federal funds to guaranty agencies operating as lenders of last resort if they do not have sufficient capital to originate new loans, and the temporary authority to purchase loans from lenders in the federal guaranteed loan program. —Michele Herrmann universitybusiness.com 16 | May 2008 PHOTO BY CHRIS KOLENO. http://www.naicu.edu/studentloansurvey http://www.naicu.edu/studentloansurvey http://www.naicu.edu/studentloansurvey http://universitybusiness.com

Table of Contents for the Digital Edition of University Business - May 2008

University Business - May 2008
Contents
College Index
Company Index
Advisory Board
Editor's Note
Stats Watch
People Watch
Sense of Place
Viewpoint
Money Matters
Financial Aid
Human Resources
Community Colleges
Art Appreciation
HR Directors Speak Out
Marketing: The Big Questions Answered
Top 5 Reasons You Should Attend EduComm 2008
What's New
Calendar of Events
End Note

University Business - May 2008