by Paula Bowker
Daily Lobo
Direct Loans is no longer the provider for the University's student loans.
UNM began processing student loans through New Mexico Student Loans, a nonprofit organization, on Jan. 1.
"For the students, the change will appear seamless," Kathleen O'Keefe, interim financial aid director said in a news release. "The financial aid process remains the same."
She said the change will be a win-win situation for everyone.
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"With NMSL we are able to give them more money and benefits," she said.
O'Keefe said the students will benefit most from this change.
"I still haven't received paperwork for my loans since last semester," said Sunday McEwen, a UNM student, who hopes the change will make it easier for her to get her problems resolved faster.
O'Keefe explained Direct Loans is part of the federal government and provides for many universities across the country. With New Mexico Student Loans as the provider, students will be able to get help faster and more efficiently. Because the loan office is in Albuquerque, it is more accessible to students who need assistance.
O'Keefe said students can pick up the phone and get help right away, where Direct Loans puts students on hold and takes longer to get back to students.
"The personalized service we can give is very accessible," said Dixie Hutchins, a loan adviser for New Mexico Student Loans.
Bryan Doyle, a student at UNM, said he also hopes great benefits will come with the change.
"I think anything is great if it's in your own city or even country," he said. "It's always nice to have someone you can yell at for your problems close by."
O'Keefe said the loan money will stay in New Mexico. An estimated $44 million will come from UNM.
Teachers, librarians, counselors and nurses get the best benefits from the move. Full-time educators and nurses who work in New Mexico after graduating receive 0 percent interest on their Stafford loans and a 1.25 percent rate on consolidation loans.
"We are trying to keep the good nurses and teachers in New Mexico," Hutchins said.
A Stafford loan is a federal loan administered by private lenders or directly through the federal government. Consolidation loans combine Stafford loans and any other loans into one payment option.
Other benefits for students include: 5 percent of the loan principle balance is reduced when students make their first 48 payments on time. Interest rates are automatically reduced by 0.5 percent when students start repaying their loans. Interest rates are automatically reduced by 0.25 percent when an automatic payment is set up. Students' 1 percent loan guarantee fee is paid by New Mexico Student Loans.
"Because we are a nonprofit, we can offer benefits that no other financial institution can offer students," said New Mexico Student Loans President Elwood Farber in a press release.
New Mexico Student Loans was part of UNM in 1970, but when technology became part of processing loans, UNM switched to Direct Loans, because it provided electronic funds transfers. Since 1981, New Mexico Student Loans ran on its own and has been the state's largest loan originator of post-secondary education loans. Now New Mexico Student Loans has electronic funds transfers.
