Congress has not given final approval to legislation ending federal subsidies for private student loans for college. But Secretary of Education Arne Duncan sent a letter Monday to thousands of colleges and universities urging them to get ready to use the government’s Direct Loan Program in the 2010-11 school year.
The House of Representatives last month passed the Student Aid and Fiscal Responsibility Act, expanding the government’s direct lending and ending the current program of government subsidies and loan guarantees for private lenders. Under that law, all colleges would be required to convert to the federal Direct Loan Program by July 1.
This will obviously entail huge administrative changes, so it’s understandable that Duncan is impressing on administrators the importance of getting a head start, even if SAFRA won’t be passed for awhile.