November 25, 2008 :: Money for College Is Available Despite Economic Downturn
Despite the recent economic downturn, loan funds continue to be available for college-bound students and their families through the Federal Family Education Loan (FFEL) Program, according to officials with the Oklahoma Guaranteed Student Loan Program (OGSLP), a division of the Oklahoma State Regents for Higher Education.
“The FFEL Program community remains dedicated to providing low-cost federal education loans during these challenging economic times,” said Chancellor Glen D. Johnson. “To our knowledge, not a single student has been unable to get a federal student loan due to current market conditions.”
An initiative of the U.S. Department of Education, the FFEL Program is the largest financial aid program in the nation and the only federal education loan program that offers students and schools a choice in lenders and the resulting benefits of competition. The FFEL Program has an impressive cohort repayment rate of more than 94 percent, which reflects participating partners’ significant commitment to preventing loan default and emphasizing financial literacy to help students understand the importance of loan repayment and the value of wise money management.
While it’s best for students to use free money first — personal savings, grants and scholarships — to pay for college, they may need to consider student loans to close the gap between available gift aid and college expenses. If they must borrow, OGSLP recommends exhausting all federal student loan options before turning to “private” or “alternative” loans. Loans disbursed through the FFEL Program often have lower interest rates, offer more flexible repayment plans and include important deferment, forbearance and loan forgiveness benefits.
To be eligible for federal financial aid, including FFEL Program loans, students planning to attend college next fall should complete the Free Application for Federal Student Aid (FAFSA) as quickly as possible after Jan. 1.
For current borrowers affected by the market downturn, lenders participating in the FFEL Program offer a variety of repayment options to accommodate unexpected changes in financial circumstances. For example, borrowers facing unemployment or other economic hardship can contact their lender to discuss a deferment, which temporarily suspends required monthly payments. Depending on the situation, borrowers may also qualify for a forbearance or modified repayment schedule to save them from delinquency and potential default. These benefits aren’t automatic. Borrowers must request them.
“The last thing a borrower needs in times of economic hardship is the added pressure of late or missed payments,” said OGSLP Executive Director Mary Mowdy. “That’s why we encourage borrowers to communicate openly and often with their lenders, especially during a financial crisis.”
Families looking for more information about federal financial aid or the FAFSA can contact a local financial aid office or OGSLP at 800.442.8642 or www.ogslp.org. Current borrowers who want to explore student loan repayment options should contact their lenders. Borrowers who aren’t sure where to start or have other questions about student loans can contact OGSLP’s early assistance department at 800.358.5460 or firstname.lastname@example.org.
The Oklahoma Guaranteed Student Loan Program, a division of the Oklahoma State Regents for Higher Education, serves as Oklahoma’s designated guarantor for the Federal Family Education Loan Program to help all qualified students meet their postsecondary educational expenses.