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Senate Banking Committee Testimony
The testimony of NAICU Vice President Sarah Flanagan before the Senate Banking Committee, in the committee's April 15 hearing on student loan issues, is now available on the NAICU Web site.
The Credit Crunch and Student Aid at Private Colleges and Universities
Between March 3, 2008 and March 14, 2008, NAICU surveyed its 952 members to gather information on how the current credit crunch is affecting student loans, specifically FFELP and private-label loans. Click here for a snapshot of the responses.
NAICU Annual Meeting
The NAICU Annual Meeting may be over, but you can still benefit from the sessions and speakers by visiting the NAICU Annual Meeting blog.
Private Colleges Fight Sticker Shock
Replacing loans with grants, cutting tuition, guaranteeing no price increases, and more. Responding to consumer needs, private colleges are redoubling efforts to stay affordable and accessible. Download our compendium of innovative efforts (updated on March 18) to see examples of these initiatives. See our news release for NAICU's perspective on this accelerating national trend.
NAICU's University & College Accountability Network
About the items posted on the NAICU site . . .
News items, features, and opinion pieces posted on this site from sources outside NAICU do not necessarily reflect the position of the association and its members. Rather, this content reflects the diversity of issues and opinions that are shaping American higher education.

Banner images provided by Bryant University.
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The Credit Crunch and Student Aid at Private Colleges and Universities
| Carnegie Classification | Percent Responded to the Survey | Percent Responded of NAICU Membership |
| Research/Doctoral | 12.4 | 42.4 |
| Masters | 31.4 | 35.1 |
| Baccalaureate | 40.3 | 33.2 |
| Associates | 2.5 | 26.7 |
| Special Focus | 13.3 | 22. |
| Endowment | Percent | Frequency |
| Less than 1 million | 6.3 | 19 |
| $1M - $49,999,999 | 54.3 | 165 |
| $50M - $99,999,999 | 12.5 | 38 |
| $100M - $224,999,999 | 11.2 | 34 |
| $225M - $449,999,999 | 6.9 | 21 |
| $500M or more | 8.9 | 27 |
| Total | 100.0 | 304 |
Lastly, a large proportion of respondents participate in both FFELP loans (87.9%) and non-federal private label student loans (76.2%). Few (12.4%) responding institutions participate in the William Ford Direct Loan Program (note: approximately 16 percent of all private, not-for-profit institutions participate in the Direct Loan Program for the FY2007-08).
I. Private Label Loans Findings:
| Question #6: If you participate in non-federal student loans, have you received any information from lenders as to their ability to make such loans in AY 08-09? | Percent | Frequency |
| Yes | 61.3 | 176 |
| No | 38.7 | 111 |
| Total | 100.0 | 287 |

We also asked what action(s) institutions would take if private student loans were no longer available to some or all of their students to meet their financial needs:

Nearly half (48.2%) of the 228 institutions that answered the question “to the extent that non-federal student loans cease to be available to some or all students at your institution, what action do you anticipate taking to assist these students in meeting their financing needs?” reported that they did not have a plan. However, 19.7 percent of the institutions said that they would offer students budget counseling or personal finance education.
Importance of Private Label Loans
The following chart asked our respondents how important are private student loans to their institutional financial health:
Combining the categories “very important” and “critically important”, 59.9 percent of institutions that answered the question “how important is private student loan borrowing to your institutional financial health?” report that private loans are essential.
The final private-loan question asked was Question 10 (To the best of your ability, please estimate what percentage of your students takes out private loans, and what the average private loan debt per student is upon their leaving the institution. Enter percentage and dollar amount). Respondents reported that an average of 20.5 percent of their students take out private loans. Students leave with an average private-loan debt of $18,868.
II. FFELP Findings
(Note: When Congress reduced FFELP subsidies in 2007 to increase funding for Pell Grants and other student aid programs, cuts in borrower benefits were widely anticipated, and are not necessarily directly attributable to the current credit crunch.)
| Question #4: If you participate in FFELP, have you received any information from lenders as to their ability to make FFELP loans for AY 08-09? | Percent | Frequency |
| Yes | 75.6 | 211 |
| No | 24.4 | 68 |
| Total | 100.0 | 279 |
Of the institutions who responded to Question #4, 75.6 percent reported that they received information from their lenders as to their ability to make FFELP loans for Academic Year (AY) 2008-09. The following graph shows what institutions have heard from their FFELP lenders, which includes loan availability and/or reduction in benefits:

While the most noticeable finding in this graph is the substantial decrease in borrower benefits (i.e., paying of fees and back-end benefits), another important finding from this graph is that nearly 60 percent of our institutions have found at least some of their FFELP lenders are no longer providing FFELP loans.
The following quotes are typical responses from our institutions:
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