A funny thing happened on the way to healthcare reform, the student loan industry was required to also be overhauled. This was a direct result of the healthcare bill that was signed into law. Many banks were once the “middlemen” for federal student loan programs, but the new law now requires all students to borrow directly from the federal government. Well, what exactly does this mean for EVERY school that participates in federal student loan programs? Quite a bit!
Schools have to change the way students apply for federal loans. Now that all schools are going through the government website for approval, their system continually crashes. The government has outlined this process as a “work in progress.” This means that Financial Aid offices at schools across the country are scrambling to help their students complete their financial aid. This is creating quite the problem for colleges and their financial aid offices. Schools are unable to determine what steps their students have completed and there is no real answer as to when these issues will be fixed.
There is good news on the horizon, though! Before the law was passed participating banks charged students a 3% origination fee. The law changed this to .5% and put more money in the pockets of students. The hope is that eventually this will result in additional funds being available for federal Pell grants.
As with any new program that is being launched whether by the government or business, there are kinks to work out. Bryant & Stratton College is currently helping all of our Online students through this process. We’ve developed some good processes for now and have trained our staff on how to best help all of our students.