Northwestern students to borrow directly from feds
Northwestern University is switching the way it offers federal student loans starting this fall, allowing students and parents to borrow directly from the government.
Northwestern had used the Federal Family Education Loan Program since the 1970s. Under that plan, borrowers got loans from private banks and credit unions.
But the tough economic times have forced some banks out of the program, and pending legislation could eliminate it completely.
Under the direct loan program, the U.S. Department of Education is the single lender.
The interest rates on some loans will stay the same under the new program, while others will decrease from 8.5 percent to 7.9 percent.
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