¶ … Tomsho, Robert & Corey Boles. (2008, April 18). "International Finance: Bank of America to Direct Student Loans to Federal Program." Wall Street Journal.
Retrieved April 21, 2008, from Wall Street Journal database. (Document ID: 1464512451).
Good news for some students in debt, bad news for other students. The Bank of America, one of the America's most important sources largest student lenders, said it will stop making private student loans. Instead, it will lend to students through a federally guaranteed program. Of course, this makes it difficult for students who need private student loans. However, students who qualify for federal student loans can breathe a sigh of relief. Also, the U.S. House of Representatives strengthened protections for the government loan program, the Federal Family Education Loan (FFEL) program, "which accounts for about four out of five college loans"(Tomsho & Boyles 2008).
Recently, more than 50 lenders, including Sallie Mae, the largest student loan provider, announced they would stop making FFEL loans. They said it was too difficult to raise lending capital with securities backed by such loans, given the credit crisis and previous federal cuts to the student loan program. However, the new House will "provide capital to lenders as a last resort if students are unable to get loans otherwise" (Tomsho & Boyles 2008).
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