The federal direct loan program, a brain child of President Clinton's, was created to eliminate the long waiting periods students undergo before receiving their Stafford Loans. Students with federal direct loans receive their loans directly from the government and bypass banks, guarantee agencies and other middlemen that make up the Stafford Loan Program. The government actually created a program that would save students time, eliminate paperwork and be less confusing. Almost 20 percent of the K-State loan volume and 40 percent of the national loan volume is currently through federal direct lending. The education committee has agreed to cap direct lending, but U.S. House and Senate must approve the decision before Clinton sees the proposal.
Students still have time to speak out against the proposal before it reaches a final decision.
This is our time to speak out. Larry Moeder, director of financial aid, said he does not think K-State will be affected by the cap, but instead smaller schools and universities will be refused direct lending. Only freshman and sophomores received loans with the direct lending program at K-State last year, and Moeder said he hopes next year's freshman will also have a chance to use the program. But if the proposal passes incoming freshman at K-State still stand to lose out. We urge you to call, write or e-mail our representatives before direct lending becomes capped indefinitely.