Loss of college loans lender may have little effect
Nancy Garmroth said she has seen much online banter among area college students about the potential impact of last week's news that South Carolina's largest student lender has stopped taking applications for private loans.
The financial aid director for Spartanburg Community College stressed that these types of supplemental loans are separate from the Stafford Federal Student Loan program and that South Carolina Student Loan Corp. will continue making federally backed loans to college students. Even though Garmroth likes the structure of alternative loans such as the Palmetto Assistance Loan (PAL), only a handful of SCC students use it because the school is a lower-cost institution.
"We're very disappointed in (losing PAL)," Garmroth said, "but in terms of it affecting our students, it's hardly going to impact us at all."
Statewide, S.C. Student Loan Corp. made private loans of about $70 million in each of the past two academic years, according to Student Loan Corp. President Chuck Sanders. He said the federally backed loans totaled $450 million in the 2007-08 school year and $440 million the year before that.
Kim Jenerette, financial aid director at the University of South Carolina Upstate, added that the Student Loan Corp. is not the only game in town.
"If South Carolina Student Loan Corp. were the only lender that was offering private loans, it would be a big to-do," Jenerette said. "However, there are still lending institutions such as Chase, Wachovia/Wells Fargo, Bank of America, Sallie Mae, that are still in the business of private loans, so if there are students who are looking for these supplemental loans on top of their federal students loans, there are options. It's just that there's one less option, at least temporarily."
Sanders said the corporation will make all of the private loans already committed for the spring semester, but it will stop taking applications until the U.S. financial market recovers.
Jenerette's advice to all college students is that, since "the sky is not falling," don't panic, then seek assistance from the institution you're attending or looking to attend.
He said his office has received little extra call volume or student visits since the news broke.
"I don't mean to minimize anything that's going on, because they are my colleagues and my friends who are losing their jobs," Jenerette said. "But in South Carolina (the effects) have been minimal for the most part, and there hasn't been a lot of reaction here at (USC) Upstate to this whole mess. Our students are able to get student loans. And fortunately for us, we're reasonably priced compared to your higher-cost private institutions, so that may soften the blow, so to speak, for us."
But what about private schools such as Limestone College?
"Well, it's not going to be good," said Bobby Greer, assistant director of financial aid at Limestone.
Greer said the volume of alternative private loans for Limestone students has increased each year for the past few years. Despite the fact that all loans already approved for this school year still will be honored, eventually "it's going to impact us."
"It's just a matter of how hard."
Source: http://www.goupstate.com/article