Worries about whether the credit crunch will affect student loans got a little bit less daunting as Tufts University announced this month that it will help ensure student and parent access to competitive loan funds by participating in the Federal Direct Student Loan Program.
The program will begin with the 2009–10 academic year. Loans currently in place for the 2008–09 academic year or for prior years will be unaffected.
“This change will ensure that undergraduate, graduate and professional students will continue to be able to access low-cost federal education loans,” says Patricia Reilly, director of financial aid for the schools of Arts & Sciences and Engineering. “Last year, a number of private lenders stopped making loans to students while others changed their terms, so they were not as attractive to borrowers. We believe moving to this program will minimize the impact of the current student loan credit crunch on our students and their families and simplify the application process.”
Students who need loans for next year won’t have to worry about financial institutions not lending to them. Funding for these loans comes directly from the federal government instead of private lenders. In addition to ensuring consistent access to federal loan funds with competitive rates and repayment options, Direct Student Loans cannot be sold to other financial institutions.
Maintaining access and affordability for a Tufts education is the university’s number-one priority during the current economic downturn, says President Lawrence S. Bacow. In a recent letter to the Tufts community, he noted, “We must put our students first. We have a moral obligation to help them complete their Tufts education. For our undergraduates, this means meeting their full demonstrated financial need. For our graduate and professional students, this means helping to ensure that they have the access to loans and other resources so they can complete their studies.”