May 1 deadline set; more funding sought
The agency that oversees Kentucky's college-loan program says it's unable to secure money for new loans right now -- meaning thousands of students may have to turn to private lenders to pay for their education.
The Kentucky Higher Education Student Loan Corp. blamed ongoing fallout from the global credit crisis as it announced yesterday that it will suspend making college loans to first-time borrowers on May 1, until it can secure additional financing.
The corporation, also known as The Student Loan People, said it will continue to make loans to previous borrowers, based on availability of funds. The corporation uses federal and private funding to provide loans.
"We're hoping things will move and we will be able to come back in 30 days and tell the universities we will be able to make loans we ordinarily would," said Jo Carole Ellis, vice president for government relations and student services at The Kentucky Higher Education Assistance Authority, which acts as guarantor for loans provided by The Student Loan People.
The announcement was particularly bad news at a time when public universities and colleges in Kentucky are preparing to raise tuition for next school year. The Kentucky Council on Postsecondary Education is scheduled to vote on those proposals May 9...
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