Fallout from college loan scandals threatens to affect a 40-year-old student financial aid program used by every school in North Dakota.
Julie Kubisiak, director and senior vice president of student loan services for the Bank of North Dakota, said she's worried that Congress is on track to penalize the Federal Family Education Loan Program.
The program is a public-private partnership created in 1965 to administer guaranteed education loans to students and their parents.
Stafford loans are the largest component of the program.
About 3,500 colleges in the country use the program, including every higher education institution in North Dakota and several in Minnesota.
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Budget cuts proposed in Washington could cripple the program and put it out of business, said Gwyn Walcoff of Consumer Bank Associates, which represents lenders that participate in the FFEL program.
Part of the motivation behind the proposed cuts is due to the misdeeds of a few lenders, Walcoff said.
Any cuts or further requirements that would increase the cost for servicing student loans will have a direct impact to the Bank of North Dakota and to the state, Kubisiak said.
Readers can reach Forum reporter Amy Dalrymple at (701) 241-5590
