This is the worst year I can remember for financial aid administrators. Because of the huge subsidy cuts to lenders, and New York Attorney General Andrew Cuomo's investigation into lender-school relationships, the lending industry has been turned upside down.
Direct lending hasn't been affected nearly as much as the Federal Family Education Loan Program. Stafford Loans that require a lender have seen a major overhaul in the whole lending process. Up until this year, we were able to assign lenders to students, which meant we used lenders who had the best repayment plans and customer service. Those days are gone. Students who have used the same lender for several years may now have to choose a new lender. Schools can no longer encourage a student to select the best lender. It's worse with private alternative loans. Schools can't even recommend a lender. It's sad, because students on my campus are left hung out to dry with finding their private lender. I feel like I'm not doing my job to help these students.
What this has created is a delay in servicing students. Interest rates and processing fees have changed, and lenders are scrambling to accomodate the changes. Schools are scrambling to accomodate students who use lenders that do not have an electronic process with the school.
On top of the loan crisis, new federal programs are creating additional work for schools. The new TEACH grant is expected to be implemented this fall, but only recently were the federal regulations created. For schools participating, they now have to take those regulations and implement them in their financial aid process. For us, it means a backlog of computer programming. Additional staff is needed, but the funding isn't there.
I have heard around my state that students are complaining they can't get through to their financial aid office because of busy signals when they call. Email inquiries are at an all-time high, but most schools don't have the additional staff to respond. Understand that financial aid offices around the country are doing the best they can, but you might experience delays in disbursement of financial aid and customer service. Believe me, your financial aid office is as stressed as you are.