<p>Son's private school just announced that their endowment funds are down 13%. Actually, that doesn't sound too bad, does it?!! They are encouraging students to figure out their situations and let them know if they will need loans, saying they want to help students find good loans at reasonable rates. I'm sure they really want to know what they're dealing with and how many students will be returning.</p>
<p>Kind of like, we've given you our bad news, now you give us yours.</p>
<p>Yikes. So is this there way of telling students to not expect as much aid next year???? </p>
<p>What's the word on the campus from your child's friends????</p>
<p>If a school really believes in the quality of their product why don't they offer student loans funded from their endowment? I'd love to hear the answer to this question.</p>
<p>A closely related op-ed from the Los Angeles Times: </p>
<p>Don't</a> judge a college endowment by its wealth - Los Angeles Times</p>
<p>Son is a freshman, but kids don't seem to know what's happening out here in the real world. Maybe parents aren't talking to their kids because they are waiting to see what happens with loans/stock market, etc. </p>
<p>tokenadult.....18% of colleges don't even have endowments!!?? It would be interesting if schools would be willing to make their own loans, but I doubt many would be brave enough. I agree with the article, and don't think using endowments should be mandatory.</p>
<p>Perhaps parents are not talking about it, because they plan on filling out the required fA forms, and then they will wait for their package. If it is unaffordable, at that point they can tell little Johnny that he will need to take a semester off and transfer to an instate school. I am sure that many parents are thinking, why upset their kid while he/she is away at school, when they do not even have package on the table for next year? The last thing they want to do is cause emotional strain that might effect grades.</p>
<p>My question remains valid and unanswered.</p>
<p>Why don't colleges with endowments lend some of that money to their students in the form of loans above the amount of grants? </p>
<p>Could it be they fear of possible legal recourse? (AKA, a crisis of confidence in the true value of the service they are selling?)</p>
<p>Don't some colleges administer loan programs already? I suppose some colleges think that having a specialist (a banker) offer a third-party loan is better than the college dabbling in a business that is not its core business of educating students. Lending at retail (student by student) is a lot more expensive, administratively, than being an institutional investor of a large endowment fund.</p>
<p>Colleges would most likely incur greater costs from administering a loan program out of endowments than they would just giving it out as grants/scholarships. Also, don't forget that endowments often have restrictions on use. </p>
<p>As for what f/a offices are telling students, my D's school just recently announced that they will now replace need based loans with grants. That, of course, will open up the possiblity of borrowing unsubsidized Staffords to help meet EFC.</p>
<p>I work at a school that has a substantial population of very low income students. Enrollement dropped almost 5% this year. The school is exploring how to keep that number from rising next year. For our part, we are offering students financial literacy seminars in an attempt to help them understand the impact of the loans they are taking out ... and hoping to get some of them to assess the spending choices they are making.</p>
<p>Interesting article, tokenadult -- thanks for posting it.</p>
<p>Tokenadult, you did mention that some schools already administer loan programs. In addition, the administration of Perkins loans is done to a large extent by the schools. The added administrative work for loans is in collecting them, IMO. While most of us here would pay our debts, MANY do not ... and there is a lot of time and effort that must be put into locating debtors and collecting on the debts.</p>
<p>Intersting. If the FA office is telling students that the endowment is down 13%, I would assume that is for September. Most of the stock market damage has occurred in October.</p>
<p>13% could just be the first third of the decline, with two more shoes to drop...</p>
<p>Yes, I took that analogy too far. Sorry.</p>