Leading loan lender suspends funding program for next year

It may be more difficult to receive alternative student loans after New Hampshire's leading loan lender suspended its Loan for Education Assistance Funding (LEAF) program for the upcoming 2008-2009 school year.

The New Hampshire Higher Education Loan Corporation (NHHELC) lent out over 6500 loans to students totaling nearly $67 million in fiscal year 2007.

The alternative loans program is intended to close the gap between what school costs and what students have already received for aid.

Tara Payne, vice president of Corporate Communications for the N.H. Higher Education Assistance Foundation (NHHEAF) Network Organization, said students in the University System of New Hampshire, which includes Keene State College, took out an average alternative loan of $7,956.

"Our concern is where are these students going to go to get the same amount of money," she said.

"We have some of the highest school rates in the country but one of the lowest levels of state aid. That creates the dynamic that forces students to borrow more. It's the whole reason why the alternative loans program exists."

Freshman Catherine Hadley borrowed from the NHHELC and planned to do the same next year. But she said the crisis might force her elsewhere.

"My dad had been unemployed for a year and just barely got a job," said Hadley. "We have no money and it's going to be rough."

In an interview posted on the NHHEAF Networks Website, Rene A. Drouin, president and CEO of NHHEAF Networks Organization, pointed out two reasons why NHHELC was forced to suspend it's alternative loan program.

She said, "We borrow money to fund loans by selling auction rate certificates (a type of bond) and right now, investors aren't investing in the bond market … also, Congress passed the College Cost Reduction and Access Act last fall which slashed federal subsidies to student loan companies."

However, Payne said that there is more concern than just how students will get their loans.

With the rising school tuition rates and the less chance of getting good aid through alternative loan programs, Payne noted the fear of college dropout rates increasing couldn't be ignored.

"Will there be empty seats in the fall?" she said. "I don't really know how to answer that question. But it is another concern that needs to be taken in to account."

Junior Peter Najem, said even though he doesn't receive loans from NHHELC, he feels for the people who will be losing all that money.

"I feel if I had to quit school even though I really wanted to be here, I would feel like I was getting cheated," said Najem.

Payne advises students to stay in touch with the SFS because they are in touch with the loan firms that can offer help.

"Also be sure to file the FAFSA," she added. "I recommend going to SimpleTuition.com. to compare loan options and to do the best they can to keep their credit strong."

Sophomore Brendon Johnson expressed his concern about the issue tied in with the housing crisis.

"I think it is a real issue," he said. "Especially here at Keene with the housing crisis and everything. It's going to be a mess."

KSC SFS refused any direct interview but did mention in an e-mail message it is hard for SFS to make any definitive statements.

Carol Stanmore, the associate director of SFS, also said the office has sent out e-mail notifications to the students who participated in the LEAF program and have encouraged these students to make appointments with SFS councilors.