Beginning July 1, the total number of schools in the program will climb to about 1,400, or 40 percent of total loan volume, as set by law. More than 2 million students are expected to receive direct loans next year. By the end of the first month of school this year, there was a 43 percent increase over 1993 in loans originated and funds disbursed to students. In addition to having loan money earlier in the school term to pay for books and other up-front expenses, students also report that they borrow less because it is now so easy and simple to obtain additional funds if needed compared to the hassle under the FFEL program. Borrowers with direct loans also benefit when it's time to pay back their loans.
Taxpayers also gain from direct lending.
We're determined to make the loan process simple, easy and efficient, and it's working. Last month, the Education Department held a meeting in New Orleans to provide schools who will begin direct lending in the 1995-96 school year with training and technical assistance to get the program up and running smoothly. Campus officials from the 104 schools that began direct lending this year also attended, sharing their start-up experiences and describing its advantages. Assuming control of the loans, they said, means corrections and adjustments are easy to do and the whole process flows more smoothly. There's no more waiting for checks or tracking down checks with 101 different lenders.