Student lending landscape in flux


College administrators face a student lending landscape in upheaval at a time when students are borrowing more money than ever to pay for college.

The Obama administration wants to end federal subsidies for private student loans, forcing colleges to shift to a direct-lending model from the government–and the House of Representatives passed legislation in September to make that happen. But the Senate has yet to take up the bill, and Capitol Hill staffers say that’s not likely to happen until after lawmakers resolve the health-care debate.

Now, the Education Department (ED) is trying to force the issue. Education Secretary Arne Duncan urged colleges and universities last month to prepare to use the government’s Direct Loan Program for the next school year. But college financial aid directors are split in their support for the switch, which could require the use of new software and training.

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