Student Loan Dodgers

Yet another large student loan lender has decided to reduce its federal student loan program options. The Student Loan Corp, which is 80% owned by Citigroup Inc, announced on April 16^th, 2008 that it would suspend lending federal student loans to certain schools and withdraw from the Federal Consolidation Loan market, effective May 1, 2008. The company is blaming higher costs for funding by the “continued disruption in the capital markets” and new federal law changes on the subsidies for the reduction in their student loan portfolio.

The Student Loan Corp. hopes the changes to only be temporary and hopes to return into the student loan consolidation market as the market improves and changes in congress take place.

So far over 43 lenders have dropped completely out of the federal student loan lending market or have suspended student loan consolidation lending until further notice. Some of the largest lenders include; Sallie Mae (SLM), Nelnet, NextStudent and CIT Group.

I’m sure it’s only a matter of time before my schools financial aid office is effected by all this craziness going on in the student loan industry.