Partnership loan no longer available to students

Partnership loan no longer available to students

by Brittany FriesthStaff Writer

Due to the current national financial market triggered by sub-prime lending, Iowa Student Loan is lacking funds from private lending partners to provide Partnership Loans. As a result, ISL will not offer the option for the 2008-2009 school year for all Iowa students. Tracie Pavon, assistant vice president for enrollment and financial assistance, is surprised at the extent the economy has played on financial services. “I don’t think anybody ever thought it would hit student loans,” Pavon said. With the Partnership Loan unavailable, the significant change will be that students are no longer provided with an option to not have a co-signer. ISL was one of the few local lenders to offer this type of private loan.”We’re trying not to cause a panic,” Pavon said. “This has been shocking because Iowa Student Loan has been the biggest provider of private loans in many Iowa schools, but there are many other private loans still available.” The Stafford, Perkins and Parent Loans for undergraduate students will not be affected. Although there will be no private lending available from ISL, these federal loans are serviced through the organization and will still be included in student financial aid packages. Out of the 498 current students who have a partnership loan, 75 percent do not have a co-signer. Pavon feels confident a majority of students will have access to co-signers. “We ran some reports to see how many students at Simpson did not have co-signers and whose parents were denied credit, and there were only 39,” Pavon said.Sophomore Steve Lovitt is apprehensive about this specific change because students now have to rely on parents or someone else to obtain a loan. “I think it’s horrible and now it’s not possible for students who want to pay for college by themselves,” Lovitt said. Another problem for Lovitt is whether or not his divorced parents can co-sign.”This puts a lot of tension on whether or not I can have a loan,” Lovitt said. Freshman Megan Ripperger has a partnership loan with a co-signer. Although she doesn’t feel she’ll be as affected by the change, Ripperger is concerned for those students who do not have a co-signer. “A lot of people will be affected because Simpson is an expensive college,” Ripperger said. “It’s going to be harder for them to get outside loans because most lending places will not give students loans–they don’t have established credit.” Pavon strongly advises students to contact her if they cannot obtain a co-signer. “I know Simpson’s committed to those students who truly don’t have an option,” Pavon said. Before Simpson was notified of the change, school administrators had already began surveying other preferred lenders to help aid students with their private lending. Wells Fargo, Citibank, and U. S. Bank will be three primary large-scale lenders for next year. Last week, the Financial Aid Office notified parents by sending letters to parents explaining the recent changes. There will also be a financial package sent to every student that has previously borrowed an alternative loan in the past. Although Simpson provides lending options, Pavon encourages students to explore other lenders and will assist if necessary. “There are tons of alternative loans available, but you have to be careful because some of the terms aren’t great” Pavon said. “Students are allowed to borrow from any lender they choose, and although I won’t always be able to say which loan is best for a student, I’m here to help students with their questions.”