DerivActiv, the leading provider of web-based financial derivative valuations, today announced an interview series on the MuniMarket Pulse podcast about the student loan credit crunch.
Jamie Wolfe, cfo of NorthStar Education Finance Inc, warned that the present legislation to aid the student loan industry does not provide long-term solutions. Wolfe says the proposed solutions are, "half-baked," and predicts inefficiencies in their implementation that would put stress on schools’ financial positions in the fall.
The interview is the last in a four-part series in which the DerivActiv MuniMarket Pulse podcast explores different perspectives and the potential impact of the student loan credit crunch on colleges, universities, students, and lenders.
NorthStar, a non-profit lender and the provider of the Total Higher Education (or T.H.E.) loan programs in Minnesota, has suspended new loans as of April 18th. In his interview, Wolfe explains the market conditions and past legislation that have led to financial troubles at his institution and layoffs at several other student loan originators, including Sallie Mae, Nelnet Inc, and First Marblehead.
Student Loan Problems Into 2009
Paul Sheldon of Student Loan Capital Strategies, LLC, said in an interview that problems in the student loan markets will likely stretch into 2009. Student Loan Capital Strategies has teamed with Sound Capital Management, Inc. to advise colleges, universities, and lender programs in forming and implementing alternative plans to fund student loans.
Importance of Financial Aid: NAICU, FinAid.org
Sarah Flanagan, vice president for Government Relations and Policy at the National Association of Independent Colleges and Universities, described in her interview the schools’ perspective in the current situation and emphasized that "we are not in a crisis." She describes the significance of the pending legislation, the importance of loan availability and financial aid to NAICU’s member schools, and compares and contrasts the current liquidity crunch with the subprime crisis.
Mark Kantrowitz, publisher of FinAid.org, discussed in his interview the different solutions that he has proposed, noting that not one solution alone would solve the entire problem.