The student loan world was supposed to have been in chaos by now, if you believed the hype from last spring. Hundreds of college financial aid offices failing to make the transition to the federal government’s direct loan program from the competing Federal Family Education Loan Program. Students at those colleges left without loans, their educational progress disrupted. The U.S. Education Department in a freefall, databases and employees unable to handle the volume of colleges shifting to direct lending.
Three and a half months after legislation took effect that ended the origination of student loans by banks, and several weeks into the first fall semester of the New World Order in student lending, even many who opposed what they saw as the Obama administration’s heavy-handed push to kill the lender-based guaranteed student loan program acknowledge that the transition has gone smoothly.
"They’ve done a good job," says John Dean, the longtime counsel to the Consumer Bankers Association, which fought the Obama proposal. "I’m not aware of a single student whose educational plan was disrupted because of the transition…. [Department officials] should be proud of what they did."
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