Many student loans in jeopardy, Spartanburg college officials say

July 23, 2010 at 7:00 am

By Gary Glancy, courtesy of GoUpstate.com
While “the dog ate my homework” might earn a reprieve from some professors, local college students slacking on perhaps their biggest assignment this summer could end up with no choice but to take the entire semester off.

With direct lending from the federal government now the law of the land for student loans, students are required to complete a new electronic promissory note — separate from the one upperclassmen might have signed in the past with a private lender — in order to receive their Federal Stafford and Federal Parent Plus Loans for this fall semester.

At the University of South Carolina Upstate, which set a July 15 deadline for students and their families to go online and complete the form, less than half the student body has complied.

“We’ve tried every form of communication possible,” said Allison Sullivan, director of financial aid at USC Upstate, “and we’re just worried that when it comes time for them to pay their fees, their federal loan funds are not going to be here, and we have thousands of students who rely on those loan funds to pay their fees each year.”

Sullivan said the university has tried to reach students through letters, postcards, e-mails, Facebook, even text messages sent from the university’s emergency notification system, to no avail. Tuition and fees at USC Upstate are due Aug. 19.

“Unfortunately, unless they have a backup plan,” Sullivan said, “their classes are going to get dropped. We’ve looked at our sister (USC) campuses, and they’re about the same — only about half the students have done what they needed to do.”

While USC Upstate appears most concerned about the problem because of its large enrollment of several thousand students, other local colleges are reporting a slow response to complete promissory notes as well.

“I think it’s been a challenge this year, and really, the reason for that is that it’s not like we started (the new direct lending program) with just freshmen,” said Peggy Collins, director of financial aid at Converse College. “This is a change for every student.”

Sullivan and Collins said upperclassmen, who have gone through the student loan process before, probably are ignoring notices because they assume the new loan program doesn’t require any action on their parts. In the past with private lenders, Sullivan said, students and their families signed one promissory note that was good for 10 years.

“They don’t realize it’s a whole new ball game now,” Collins said.

Collins added that, from the feedback she’s received from some students, the new form involves a few extra steps.

Kendra Burnette, director of financial aid at Spartanburg Methodist College, said some families might also be more hesitant to fill out forms for the Department of Education.

”I think they’re more afraid of doing something wrong since they’re actually dealing with the federal government this year,” Burnette said. “I think they’re afraid they’re going to do something wrong (on the form), and it’s going to mess everything up. I think it’s just an uneasiness on their part.”

While Burnette and Collins said their departments will work with students and their families to get the form completed, that task is much more difficult at USC Upstate with thousands more students.

“We’re trying everything in our power to help them,” Sullivan said. “We try and keep in touch with them through e-mail, but unfortunately those students who have been out for the summer, they’re probably not going to check their e-mails until August, and it could be too late at that point.”