WEST LAFAYETTE, Ind. — Effective for fall 2008 semester enrollment, Purdue’s West Lafayette and North Central campuses will offer loans funded by the federal Direct Loan Program, university officials announced Monday (May 12).
Purdue University Calumet already uses the Direct Loan Program.
Previously, the two campuses processed student and parent federal loans through private lenders and service providers that were part of the Federal Family Education Loan Program (FFELP). Until the last few months, these lenders offered attractive benefits to Purdue borrowers, said Morgan R. Olsen, executive vice president and treasurer.
“Recent volatility in the national credit markets and reductions in federal subsidies available to lenders participating in FFELP have led many lenders and service providers to stop offering borrower discounts or to discontinue participation in FFELP altogether,” he said. “In the Direct Loan Program, the U.S. Department of Education acts as the lender, providing funds for Stafford and PLUS loans. Since borrowing is directly through the federal government, loan availability is not expected to be affected by credit market turmoil.
“Also, since many FFELP lenders have stopped offering discounts and changes in their terms are occurring on a regular basis, the Direct Loan Program, which started in 1994, is now offering the more stable, attractive terms for Purdue borrowers.”
Maintaining a stable and predictable source of student loan funding was one of the key reasons that Purdue made the change, said Pam Horne, assistant vice president of enrollment management and dean of admissions.
