CSUB's direct lending status an advantage for students seeking loansJune 30, 2008
Kathy Miller, 661/654-2456, email@example.com or
Michele Newel, 661/654-2720, firstname.lastname@example.org
As news of the nation's credit crunch spills over to student loans, California State University, Bakersfield officials are reminding students that the campus has loan options not offered by all colleges and universities.
While many colleges and universities rely on private lending institutions to assist students with financing, CSUB participates in the Federal Direct Loan Program and is not impacted by the recent discontinuation of numerous private student loan products.
"The news can sometimes be confusing to students who may think all student loans are the same," explained Ron Radney, CSUB's interim director of financial aid. "We certainly don't want students to postpone their educational goals without understanding all the facts. As a direct lending institution, we can still offer our students who need financial assistance the help they have always relied on."
CSUB has been part of the Federal Direct Loan Program since the 1994-95 academic year. The program was created to simplify federal student loan delivery and provide borrowers with flexible repayment options.
"The direct lending process is very straight-forward and loans do not get bought and sold on secondary markets," Radney said. "Repayment can be contingent on income levels, making monthly payments more manageable."
Private lenders cite high default rates as a major reason for dropping student loan products, a trend CSUB has avoided. University officials note that since becoming a direct lending institution, CSUB has seen loan default rates drop from 14.73 percent to 2.89 percent.
"Being a direct lending institution is really a benefit to our students," Radney added. "Last year 3,500 of our students used some level of loan support to help finance their education. We want to reassure students that our loan program is continuing unchanged."
For additional information about the direct lending program or other financial aid options at CSUB, please call (661) 654-3016.