I know this is the busiest time of year for you so I thought I could help out by telling you what we are hearing and providing some advice your institution can implement now.

Increasingly, my colleagues and I at Hardwick~Day are hearing this from colleges: they have issued Requests for Proposals as they assemble a preferred-lender list, only to learn that one lender or another will not submit a proposal, or that an existing proposal is being withdrawn.

To be sure, we've also heard from colleges that have been assured by one or more of the traditional banks that, because of their low default rates, this or that particular college's students will find loans accessible.

Our concern is that this accessibility will be limited and that those limits won’t be visible until they’re reached. We believe the situation is rather more serious than it appears, so we were heartened to hear of institutional preparation at Occidental, where last week the college’s board initiated and approved the use of $6.5 million in quasi endowment funds for emergency lending.

We continue to believe many students will have trouble getting the loans they need for this fall. We expect there will be only a few lenders willing or able to commit, and none of them in an open-ended way.

There are no generic solutions, so our advice is this:

1. Your CFO and financial aid officer should be having serious conversations with the major traditional banks in your region about their willingness and capacity to meet the loan needs of students from your school specifically.
    
2. These talks should involve a bank officer at a higher level than the student loan marketing personnel. Where beneficial, these talks should be trustee assisted, especially if the trustee is someone steeped in capital markets.
    
3. Consider lenders who have stated they will expand their loan programs, such as Wells Fargo, Citi Bank, JP Morgan Chase, and US Bank. As with regional banks, you must conduct due diligence to ensure that what these lenders say next week will be true next month.
   
   3a) Get everything in writing. A day after I wrote #3, Chase announced it will no longer serve colleges with high-risk borrowers and that it's eliminated front-end benefits for borrowers with good credit.
    
4. Consider other borrowing sources for your students such as campus-based loan funds, leveraging your institution's relationships with local corporations, and even alumni and lead donors.
    
5. Counsel families to act now and get their applications filed. You might refer them to this two-minute Wall Street Journal video linked here.

I've assembled a 5-page brief here that may be helpful background for you, and I'll be updating it frequently.

Also, please feel free to call me (952 854 2979) if you think it would be useful to talk through all of this with your particular circumstances in mind.

I hope to see you at the Summer Seminar June 12 and 13, where Hardwick~Day's workshop will feature American Public Media economics correspondent Chris Farrell and NAICU's Sarah Flanagan.

Best regards,

Jim Day