Graduating Senior Manjul Bose didn’t know what was coming. He was expecting his financial aid to go through the way it always had.

For the past three years, Bose, an environmental science major, received two Stafford Loans ?” subsidized and unsubsidized ?” each year through the university’s Direct Loan process.

By July, Bose had not received a letter from the Financial Aid Office. Little did he know that the Financial Aid Office had switched from providing Stafford Loans through Direct Loans, which are distributed by the U.S. Department of Education, to providing these loans through the Federal Family Education Loan (FFEL) Program, which requires students to pick a private lender.

Bose finally learned of the change through an online forum started by a Sacramento State student on MySpace ?” a popular online community. This completely screws things up for me, Bose wrote in the forum.

Questions arose upon the discovery of the change. Bose said the change confused him. He began to ask why it occurred, why students weren’t informed earlier and what needed to be done

Interim Associate Director Addalou Davis of the Financial Aid Office said the switch was a joint decision made by Financial Aid Office staff, former Financial Aid Director Linda Joy-Clemons and the approval of administrators, including President Alexander Gonzalez.

Validation Unit Manager Andrea Roush of the Financial Aid Office said the decision to change to FFEL was a process itself. We did research before coming to this decision, Roush explained.

Roush said the research began two years ago when the university decided to switch Federal Parent PLUS Loans from the Direct Loan Process to the FFEL. It’s been a long process.

The university used FFEL for Stafford Loans in the past ?” Davis said this program has been around since 1972. Davis and Roush estimated that Sac State switched to Direct Loans in the mid- to late- ’80s.

The main reason why the switch was made was because of the benefits students receive by picking a lender. We saw the benefit that students can save, Roush said. Direct Loans are efficient, but they have no benefits, Davis said.

Under the new loan process, students have the freedom to pick a lender that they determine as their best choice ?” the list of lenders include Bank of America, Citibank, SunTrust Education Loans and Wachovia Education Finance. The full list of lenders for Stafford Loans can be seen at www.csus.edu/faid.

The benefits the lenders offer range from eliminating origination fees and discounting certain percentages if a number of payments are made on time to giving back a percentage once the loan is paid in whole.

Roush said the elimination of origination costs, or loan fees, is one of the best benefits from FFEL.

Direct Loans charge an origination fee of 3 percent that is deducted from the initial disbursement, Roush said.

So, say on a $1,000 loan, $30 is taken out of the disbursement, but the student still pays back the full $1000 in repayment, Roush explained.

This means a student will lose $900 if they have a $30,000 loan.

But Bose said the lenders’ benefits don’t seem worth the trouble.

I don’t see how it’s a better deal for the student. We have more things going on to sit down and figure out our financial aid, Bose said.

He added that students are not well enough informed about each lender and that could lead to more consequences. If a student is not aware, he will sign himself into more trouble, Bose said. With Direct Loans you’re protected by the government. With private companies, you’re getting shafted.

He also questioned whether the university was receiving any profit from the lenders for switching to the FFEL process.

We do not receive any funds/money from lenders, Roush said.

Junior Amanda Hearon was also concerned about having to pick a lender.

It was very confusing, also upsetting, Hearon said. The biology major had learned about the change after receiving two letters in the mail prompting her to take a loan-counseling exam. She said the letter did not specify that she had to choose a lender.

It was never that clear I was going to have to pick a lender. So when it prompted me to pick a lender for my loans, I was like wait, what am I supposed to do? Hearon said.

I was very confused at first; having to pick one lender out of the list gave me a headache. I felt that I honestly had to research each one of them to make the correct decision, Hearon said.

Davis said the university is working with SimpleTuiton, an online tool that helps students compare the benefits of different lenders. Roush said the website ?” www.simpletuition.com — is very student-friendly.

Both Bose and Hearon researched before picking a lender. Bose consulted a friend who works at a bank. Hearon studied the benefits. The two picked Bank of America as their lender based on the benefits.

But Hearon said she would have felt more comfortable if the Financial Aid Office had explained why the change was made.

I honestly feel that Sac State should have made the effort to send out a letter to the students explaining, in-depth, the changes that have been made, Hearon said. One would think that the school is here to help us, not to confuse us even more.

Bose was also upset that he had found out about the change in the middle of the summer rather than some time in spring. Why didn’t they let people know in spring? he asked with a frustrated sigh.

Roush said posters were placed in and around Lassen Hall about the change over the summer. Davis said everything started late this year. Things happened federally, she said. The process of FAFSA changed, delaying system updates, Davis said.

The two also said the Financial Aid Office doesn’t have enough pull to inform students because they use the e-mail addresses students list on CasperWeb. They encouraged students to update that e-mail if needed and to check their SacNote frequently.

As for the process of the new loan program, Bose and Hearon found it to be easy.

EdFund, a guarantor and state agency that keeps communication between the university and the lenders clear, oversees the whole process.

Bose felt that dealing with other parties, such as lenders and EdFund, could prompt more problems.

Roush said the communication with lenders has been good. We feel we have better communication and customer service with lenders than we ever did with Direct Lending, Roush said. There is really only one more entity in the FFEL process than there was with Direct.

Although she had a hard time at first, Hearon doesn’t think the change was negative. Now that it’s over I realize the whole process isn’t so bad. It’s just new, she said.

Nika Megino can be reached at [email protected]