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Abstract

New York University (NYU) began selective participation in the Federal Direct Student Loan Program during the 1995-96 academic year. In order to inform campus decision makers about possible expansion, a study was instituted at the same time to evaluate and compare the effects of the Direct Loan and the Federal Family Education Loan Programs on students, families, and campus administrators. The study was designed to investigate each program and compare them. Also, since the FFEL Program delivery system in New York has been streamlined and automated for some time, comparison of "best practices" in the two programs was possible. The study is ongoing and in the future will include longitudinal follow-up to explore possible influences on choice of major, retention, and default rates. At this stage, the initial survey of student satisfaction and interviews with campus administrators have been evaluated. Our findings suggest that participation in both programs, rather than just one, may pose some challenges for campus administrators and staff, but not for students. Also, while student reactions to the two programs were similar and positive for the most part, there were some troubling differences among students of different ethnicities and income levels.

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