By 1992 there were 46 state or nonprofit guarantee or loan services agencies and about 7,800 commercial lenders. S. Hannah, "The Higher Education Act Of 1992: Skills, Constraints, and the Politics of Higher Education," in Public Policy and Higher Education. Ed. L. F. Goodchild, Lovell, C. D., Hines, E. R., & Gill, J. I. (Needham Heights, Mass.: Pearson Custom Publishing, 1997).
Schools as Lenders
As of October of 2003, more than 62 colleges and universities "have entered into school-as-lender deals with student-loan companies. Universities are enticed by the guaranteed profits the program promises; lenders find the program worth their while because it helps them land exclusive deals with the colleges
1. Step one: A bank or student-loan company gives a university a line of credit.
2. Step two: The school uses the line of credit to make loans to graduate students.
3. Step three: Within months, the university sells the loans back to the company.
4. Step four: The [not-for-profit] school pockets a premium as profit"M. Barnett, and B. Julian, et al., "Big Money on Campus: How Taxpayers are Getting Scammed by Student Loans," U.S. News and World Report, 27 October 2003.
- "Not-for-profit institutions in the academy are taking on the characteristics and activities of profit-making organizations" G. Rhodes, and S. Slaughter "Academic Capitalism, Managed Professionals, and Supply-Side Higher Education" in Chalk Lines: The Politics of Work in the Managed University. Ed. R. Martin. (Durham: Duke University Press, 1998), 38.
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