I received word today that my Stafford loan lender for school (Northstar’s Total Higher Education Loans, T.H.E.) is temporarily suspending new loans for next year. As I went to look at the benefits available through another popular med student lender, MEDLOANS (a Sallie Mae subsidiary), I quickly read about how Sallie Mae is likewise tanking financially. They have not said anything about their plans for the 2008-2009 school year, despite its impending beginning. This is a problem, and not just for me. It’s a problem for nearly all students in higher education.
This is frustrating because I really like T.H.E., and I don’t want to look around for another lender. They gave great benefits to their borrowers, like no fees and good interest rate reductions with on-time payments. Unlike most other lenders, they also paid out benefits to more than 80% of their borrowers (many other lenders only pay out 20% or less), and if you lost your interest rate reduction benefits, it was very easy to get them back. They even have their own blog called The Ramen Report, which keeps students informed about hot topics and “things you should know” about financial aid.
Seeing good companies like this, standing there holding a bucket with a hole in it, makes me angry. We need to get the economy back on track, and I’m not sure that the soon-to-come economic stimulus packages are going to cut it.