If this program is so wonderful — no loan limit, no credit check, low interest rate — why don more schools participate?
There are several reasons why a university might not want to participate in this program: There is some risk-sharing by the schools. As a result, the program will be most attractive to schools with a low default rate. The schools receive less than the full face value of the loans immediately, with the up-front amount depending on the school’s default rate and the interest rate. In effect, the schools are providing part of the loan capital. There are no federal guidelines or regulations governing this loan program. Membership is not open to two-year colleges.
Related Questions
- How soon will schools that currently participate in the FFEL Program be required to convert to the Direct Loan Program?
- If this program is so wonderful -- no loan limit, no credit check, low interest rate -- why don more schools participate?
- What schools participate in the No Interest Loan (NIL) Program?
