Printable VersionMohave Community College has received approval to deal directly with the federal government to secure student loans after a tide of private lenders stopped lending to the college.
About 3100 MCC students receive financial aid, and approximately 60 percent of those take out student loans, Osborn said. Nearly $10 million in loans were disbursed in 2007-08, and more than $4 million has already been disbursed this year.
The loss of AHELA leaves just two private lenders available to MCC students from a pool that once included Citibank, Wells Fargo, FinanSure and CollEDGE.
Those lenders informed the college last spring that they were no longer lending to community college students, Osborn said. Another lender, Wachovia Bank, recently had its operations taken over by Citigroup.
"We decided this market looked pretty unstable," Osborn said. "When you have these major lenders not willing to lend to community colleges, the writing's on the wall."
The college applied for the government's Direct Lending program earlier this year and was approved for $3.7 million in student loans. It offers a third option for students, who can continue to borrow from Union Bank & Trust and the New Mexico Student Loan Association through the Stafford loan program.
The additional funds should be enough to cover students' loan needs through the end of the academic year, by which time AHELA has said it will have finished its restructuring and resumed processing loans, Osborn said.
Though the money is there, some students could have their loans delayed if they have to find new lenders.
"They may have gone through the process with a lender like AHELA or Wachovia, and that may not be honored," Osborn said.
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