Ball State does not intend to follow Indiana University and abandon its reliance on federal loans.
According to Robert Zellers, the director of Scholarships and Financial Aid, Ball State will continue its use of the federal direct student loan program, which allows Ball State students to receive college funding through loans from the U.S. government.
IU announced it would switch in the 2004-'05 academic year to Federal Family Education Loan Programs, in which private lenders such as banks and credit unions make loans to the students rather than the government. Indiana's decision, Zellers said, was prompted by administrative issues the university was forced to address.
"Indiana University is a multi-campus structure," he said. "And with eight locations, it was necessary for the administration to centralize to a single-loan system for all of its campuses."
Both IU's Bloomington and South Bend campuses began using the Direct Loan Program in the early '90s, while its other locations continued to use the FFEL system. For efficiency, the university decided last month to once again implement FFEL Programs as its primary method of administering loans.
IU's choice to return to the private loan system was also influenced by its induction of a $38 million software change. The new software, PeopleSoft, will allow for greater unification among IU campuses and replace older systems that were not as compatible among the different universities.
"This hasn't been an issue of IU being displeased with the Direct Loan Program, but more about making it easier for them to return to a single-loan program," Zellers said. "Here at Ball State, we have found the direct lending to work well for our university, and we feel it is much easier to administer to students."
According to Zellers, the FFEL and Direct loans are similar to one another.
"With both programs, the loans are federally guaranteed and credit history will not be an issue," he said. "Because we are a singular university we don't have to face such a matter; but, if so, I'm sure we would also try to use one program for all campuses."
According to Douglas McConkey, the vice president of student affairs and enrollment, and Zellers, the estimated $100 million currently used by IU for its Direct Loan Program will not be redistributed to other state universities.
"Indiana schools had never faced restrictions for the amount they could receive in government funding, but the IU switch does not mean more funding will now be given to other state schools," Zellers said.
Ball State currently administers more than $38 million in Stafford Loans to more than 8,000 students under the Direct Loan Program.
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