Major banks drop student loans; University looks to cut spending

Four major student lenders have dropped loans for University students, and administrators are looking at ways to cut back spending in accordance with a state mandate as the Wall Street crisis hit University Boulevard this week.

Lenders Chase, Southside, College Loan Corporation and Capital One have dropped out of the University’s student loan program, said Candice Lindsey, associate dean of financial aid.

“We still have plenty of lenders who are remaining in the program, so the only contingency necessary is for the student to select an active lender,” Lindsey said.

Lindsey said Bank of America, Wells Fargo, CitiBank, Nelnet and Austin Bank, among others are still participating in the financial aid program.

She said all current loans are safe, but students should look for alternative lenders after their current loan is used.

“We haven’t had any lenders withdraw funding in the middle of a loan,” she said.

On the administrative side, President Rodney Mabry sent a letter to the faculty Wednesday to prepare for a possible economic downturn in the state.

“We will be developing contingency plans to reduce UT Tyler expenditures this year and for the next budget cycle,” Mabry said. “There is no need for panic—we’re just holding back a little, making plans, and being smart about the future.”

The letter is in response to Texas Governor Rick Perry’s request to executive agencies to develop plans to cut costs – beginning with travel expenses.

“Within the next 10 days, please notify my office in writing of your plans to reduce travel in your agencies,” Perry writes.

But Gregg Lassen, vice president of business affairs, said travel expenses aren’t a large portion of the University’s budget – only $1.7 million out of $81 million.

“We certainly will cut administration travel before we will cut student travel,” Lassen said.

Lassen said other things can be cut incrementally – making lighting dimmer, cutting back on landscaping costs and air conditioning.

“This is still a high quality institution and I want it to have a high quality appeal,” he said.

By Allen Arrick Editor in Chief