March 31, 2010
Fed overhaul hurts students; may increase Utah job losses
In a bill signed by the President March 30th, a major change is coming to the way students receive and repay student loans. Since 1977, Utah’s students have worked directly with the non-profit Utah Higher Education Assistance Authority (UHEAA), but beginning July 1, 2010, all student loans will be made directly by the U.S. Treasury and serviced by private government contractors.
According to The Salt Lake Tribune, UHEAA’s Executive Director, David Feitz, states, “In recent years, UHEAA has kept student loan default rates low thanks to the interest rate breaks it gives for on-time payment and customized payment plans for struggling students. Utah’s 2.1 percent default rate is less than one-third the national average. Even though the federal government has had a direct loan option in place since 1993, very few Utah students go that route…”
Essentially, the new legislation will dramatically affect the way UHEAA does business, and could lead to increased default rates for Utah’s students. The Tribune also reports that UHEAA’s 183 employees could be out of work if the federal government does not contract with local non-profit agencies like UHEAA to service loans made under the new program.
To read the full Tribune article, visit: http://www.sltrib.com/news/ci_14789463Posted by: Higher Ed