A Message from ASA on the Stability of Federal Student Loans

Federal College Loans Remain Available

Recent events have created questions and concerns about a possible disruption in access to student loans for college students and parents this fall. As the nonprofit designated administrator of the Federal Family Education Loan Program in Massachusetts and the District of Columbia, American Student Assistance understands the circumstances that have given rise to uncertainty about federal student loan availability, but we are concerned that many families will make college decisions based on incomplete information. The federal student loan programs remain strong, and ASA is committed to working with the U.S. Department of Education to ensure access to federal loans for all eligible students and parents.

Federal Family Education Loans, which are funded by private lenders and guaranteed by the federal government, are still by and large readily available. Approximately 2,000 lenders, including the largest and most diversified banks, remain in the program. Students and parents should also know that contingency plans have been built into the program in the event of market fluctuations. In addition, Federal Direct Loans, which are provided directly from the U.S. Treasury, will not be affected by the recent credit crunch.

Continued access to higher education is vital to the economy and future of our country. Federal student loans are absolutely the best option for students and families who need to borrow to finance higher education. During this time of uncertainty in the credit markets, ASA will do everything we can in our role as guarantor to ensure uninterrupted access to this vital source of funding.

This spring, as students make one of the most important decisions of their lives (not simply where to attend college, but how to solve the complex equation of paying for it), they should know that federal student loans remain as one of the most affordable and obtainable ways to finance a higher education.