2008 Woodie Awards
Bush signs act to help credit crunch
Rachel Becker
Issue date: 5/9/08 Section: News
On Wednesday, President Bush signed the Ensuring Continued Access to Student Loans Act of 2008, which is expected to ease the worry that the credit crunch will make it harder for students to get loans.
According to Alan Coheley, Vice President of enrollment management at BVU, an additional $2,000 of unsubsidized loans will be awarded to all college students who receive loans that are federally guaranteed.
Approximately 57 lenders have left the federal lending program. Uncertainties in the mortgage industry have made investors nervous when it comes to things like buying securities, especially those that are used to generate cash for students.
According to Coheley, the unsubsidized amount, which means it will gain interest while students are in school, is meant for both dependent and independent students.
This act means that students will not have to borrow as much from private loans.
This is an advantage for students because these loans have a higher interest rate and more up-front fees.
Though Coheley is happy about the legislation, he had hopes that it would have affected the Pell Grant as well.
"The Pell Grant has not been fully funded by Congress," Coheley said. "The government will not spend the money to raise it because they are concerned with providing more loan money at the moment."
In the past, college students received more funds from federal grants.
Now, many colleges and universities are providing more financial assistance to students than ever before. Students are also using greater amounts of loans to pay their tuition.
Efforts to provide aid to students are also present at the state level.
On Monday, Iowa Gov. Chet Culver signed a bill that creates more oversight of student loan lenders.
According to an article published in The Des Moines Register, the bill prohibits lenders from giving gifts to financial aid officials to attract customers, according to Culver.
Coheley does not agree with this part of the legislation.
"It is important to point out that Iowa financial aid officers are not a bad group of people doing the wrong thing," Coheley said. "To my knowledge, there have not been any financial aid officers charged with any kind of misconduct."
Universities that have lists of preferred lenders must make students aware of all state and federal financing options and how specific options might benefit students.
It also gives Iowa's Attorney General more oversight and control over borrowing and lending practices.
Coheley is happy with most parts of the bill.
"We are happy to see that it does not create any additional work for us in our quest to help students," Coheley said.
According to Alan Coheley, Vice President of enrollment management at BVU, an additional $2,000 of unsubsidized loans will be awarded to all college students who receive loans that are federally guaranteed.
Approximately 57 lenders have left the federal lending program. Uncertainties in the mortgage industry have made investors nervous when it comes to things like buying securities, especially those that are used to generate cash for students.
According to Coheley, the unsubsidized amount, which means it will gain interest while students are in school, is meant for both dependent and independent students.
This act means that students will not have to borrow as much from private loans.
This is an advantage for students because these loans have a higher interest rate and more up-front fees.
Though Coheley is happy about the legislation, he had hopes that it would have affected the Pell Grant as well.
"The Pell Grant has not been fully funded by Congress," Coheley said. "The government will not spend the money to raise it because they are concerned with providing more loan money at the moment."
In the past, college students received more funds from federal grants.
Now, many colleges and universities are providing more financial assistance to students than ever before. Students are also using greater amounts of loans to pay their tuition.
Efforts to provide aid to students are also present at the state level.
On Monday, Iowa Gov. Chet Culver signed a bill that creates more oversight of student loan lenders.
According to an article published in The Des Moines Register, the bill prohibits lenders from giving gifts to financial aid officials to attract customers, according to Culver.
Coheley does not agree with this part of the legislation.
"It is important to point out that Iowa financial aid officers are not a bad group of people doing the wrong thing," Coheley said. "To my knowledge, there have not been any financial aid officers charged with any kind of misconduct."
Universities that have lists of preferred lenders must make students aware of all state and federal financing options and how specific options might benefit students.
It also gives Iowa's Attorney General more oversight and control over borrowing and lending practices.
Coheley is happy with most parts of the bill.
"We are happy to see that it does not create any additional work for us in our quest to help students," Coheley said.
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