The Department is still accepting and processing Direct Loan applications from schools. Rumors have been swirling in some higher education circles that the Department had been turning away applications for the Direct Loan program because the program was at or near capacity. Another rumor said that the Department was turning schools with high cohort default rates.

"It is absolutely not true," said an ED spokesperson. "We are accepting new schools and will continue to accept any otherwise eligible school that wishes to participate in the Direct Loan Program."

During the student loan crunch, NASFAA has been working with the Department and the National Direct Student Loan Coalition to ensure that schools that wish to do so can easily transition into the Direct Loan Program. Since the end of February, 288 colleges have applied to join direct lending, according to The Chronicle of Higher Education.

By Justin Draeger, NASFAA Associate Director of Communications and Larry Zaglaniczny, Vice President for Governmental Relations.

Posted 05/21/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.