Oklahoma City University adopts new student loan program

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Corporate lobbyists upset writer
OCU adopts new student loan program
By Matthew Pruitt, Staff Writer

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Published: Monday, March 1, 2010
Updated: Monday, March 1, 2010

Matthew Pruitt, Staff Writer
I hate lobbyists. But really, I suppose I just hate lobbyists who lobby for things I don’t agree with. Realizing not all people share my views, there is a certain type of lobbyist I think should earn the disdain of every American – the corporate lobbyist.
Though I recognize it may be necessary to allow our country’s corporations to communicate their views to congress, I fear the disparity between their influence and that of the independent voting American. Now, before I wander too far off into a discussion of the pros and cons of corporate lobbying, I want to focus in on one group of pork-barrel-promoting lobbyists that have been cooking up quite a storm lately, and its been searing my taste buds.

There isn’t one single name for this lobbying group, but suffice it to say the group is led by none other than Sallie Mae, the largest provider of student loans, and a slew of other banks. This time the banks aren’t talking to congress about issues related to mortgages, high-risk loans, or a bail out. This time they’re talking to congress about you – students. The banks are trying to stop a plan proposed by President Obama that would save time and money for students, schools and the government. His plan proposes the end to the currently predominate method of obtaining student loans, the Federal Family Education Loan Program, or FFELP. FFELP would be replaced by the U.S. Department of Education’s Direct Loan Program; a program that Oklahoma City University will participate in starting this next school year.

The plan also offers other benefits to students. Under a direct lending program, students will no longer need to choose a lender. I would love that. As a student loan participant, I dread the graduation. Then I will have to figure out who in the world I should be paying my loans to. I’m sure there will be at least a few banks that come knocking on my door – my having forgotten their existence.

As the university will start participating in this program next academic year, I wondered how the changes will impact students. I spoke to Denise Flis, senior director of student financial sevices, who gave me more encouraging news – news that OCU’s graduate students will certainly appreciate. The Direct Loan Program offers lower interest loans on GradPLUS loans. The exact interest rate of future GradPLUS loans is unknown as it varies each year, but it will be lower than through the FFEL Program, Flis said.

Despite the benefits of the Direct Loan Program, opponents of Obama’s plan, argue that getting rid of the FFEL Program limits choice a student’s choice of lenders.
Really? Who cares? I don’t care who my lender is. All I care about is the interest rate I get and I can always get the money I need. The DOE’s Direct Loan Program gives me lower interest rates on government-guaranteed, loans which will be available as in the FFEL Program.

So what does all this mean for OCU students who apply for financial aid this upcoming school year? Well, all the debate over Obama’s plan to make every school use the Direct Loan Program won’t affect OCU students as much, because OCU is voluntarily opting into the program.
Students should know the process of obtaining a new loan for the next school year will be much the same as before, only this time, students will need to fill out a new Master Promissory Note and they won’t need to pick a lender.
The Direct Loan Program OCU is joining has been available since 1992 as a pilot project, but it has been gaining a lot of momentum with schools nationwide. According to data from the National Direct Student Loan Coalition, more than 1600 schools took part in the program last year. According to DOE statistics, in 2008 there were only a little over 6500 Title IV institutions, meaning schools eligible for financial aid, in the United States. Which leaves me wondering, at the current rate of adoption, is it worth it for these banks to combat it?

Even without Obama’s decree, I predict direct lending would slowly take over anyway. It just makes more sense. I’m glad OCU has come to its senses and we will now be able to participate in the DOE’s Direct Loan Program.