CHARLESTON, W.Va. - Banks across the country are pulling out of the student loan market, but financial aid officials in West Virginia say there is no reason to panic. 

About 100 banks and other lenders have stopped participating in the Federal Family Education Loan Program (FFELP), according to the National Association of Student Financial Aid Administrators. Thirty lenders have stopped offering private student loans.

Some West Virginia students have had to switch lenders, but several financial aid officials say they haven't heard of students being denied loans altogether. Still, they're monitoring the situation.

"We're definitely keeping an eye on it," said Mary Blizzard, financial assistance director at West Virginia State University.

Almost half of students borrow money to pay for college, according to a recent study by pollster Gallup and financial lender Sallie Mae. Nearly 30 percent use federal loans, while about 8 percent take out private loans.

Schools generally participate in one of two student loan systems: FFELP or direct lending. At FFELP schools, students get loans from lenders who are subsidized by the federal government. Students at direct lending schools get loans from the U.S. Department of Education, funded by the U.S. Treasury.

At West Virginia State, four of seven lenders in the school's FFELP dropped out this year, Blizzard said. But the school was able to find three more to take their place.

"We haven't had anyone who couldn't get loans," Blizzard said. "We've had a few who had to change lenders."

The lender list at West Virginia Wesleyan College also shrank, financial aid director Susan George said: "It's slim pickings." 

Still, she said no students had been denied loans.

West Virginia University, where about 67 percent of students get some type of financial aid, is a direct lending school, said financial aid director Kaye Caplinger Widney.

"Everything is fine with that [direct lending]," she said.

Like WVU, most of West Virginia's public colleges and universities are direct-lending schools, said Jack Toney, director of state financial aid programs at the Higher Education Policy Commission.

Community college students could be harder hit than those at traditional colleges, said James Skidmore, chancellor of the Community & Technical College System. Fewer lenders are willing to do business with community colleges. 

CHARLESTON, W.Va. - Banks across the country are pulling out of the student loan market, but financial aid officials in West Virginia say there is no reason to panic. 

About 100 banks and other lenders have stopped participating in the Federal Family Education Loan Program (FFELP), according to the National Association of Student Financial Aid Administrators. Thirty lenders have stopped offering private student loans.

Some West Virginia students have had to switch lenders, but several financial aid officials say they haven't heard of students being denied loans altogether. Still, they're monitoring the situation.

"We're definitely keeping an eye on it," said Mary Blizzard, financial assistance director at West Virginia State University.

Almost half of students borrow money to pay for college, according to a recent study by pollster Gallup and financial lender Sallie Mae. Nearly 30 percent use federal loans, while about 8 percent take out private loans.

Schools generally participate in one of two student loan systems: FFELP or direct lending. At FFELP schools, students get loans from lenders who are subsidized by the federal government. Students at direct lending schools get loans from the U.S. Department of Education, funded by the U.S. Treasury.

At West Virginia State, four of seven lenders in the school's FFELP dropped out this year, Blizzard said. But the school was able to find three more to take their place.

"We haven't had anyone who couldn't get loans," Blizzard said. "We've had a few who had to change lenders."

The lender list at West Virginia Wesleyan College also shrank, financial aid director Susan George said: "It's slim pickings." 

Still, she said no students had been denied loans.

West Virginia University, where about 67 percent of students get some type of financial aid, is a direct lending school, said financial aid director Kaye Caplinger Widney.

"Everything is fine with that [direct lending]," she said.

Like WVU, most of West Virginia's public colleges and universities are direct-lending schools, said Jack Toney, director of state financial aid programs at the Higher Education Policy Commission.

Community college students could be harder hit than those at traditional colleges, said James Skidmore, chancellor of the Community & Technical College System. Fewer lenders are willing to do business with community colleges. 

"Generally, default rates at community colleges are higher," Skidmore said. 

If the trend continues, more community colleges in West Virginia might consider switching to direct lending rather than FFELP, Skidmore said. Currently, about half are direct lenders.

Students and their parents shouldn't panic about access to federal loans, said Lauren Asher, vice president of the Institute for College Access and Success, a nonprofit, independent research organization based in Berkeley, Calif.

 "I think the fears have been understandable given the broader changes in the economy," she said. But "there's no evidence that people haven't been able to get federal loans.... There are a lot of lenders in the game."

It is true that private student loans are becoming harder to get, Asher said. Lenders are more strapped for cash, and they're tightening standards for borrowers.

But she said that might not be a bad thing. Private student loans often have higher interest rates, are based on credit scores, and contain more fine print than federal loans.

Widney of WVU said she tells students private loans should only be used as "a last resort."

Toney of the HEPC had similar thoughts.

"Students should exhaust all other resources before they turn to the private loan program," he said.

Recent federal legislation added $2,000 annually to the amount a student can borrow through federally subsidized loan programs. That boost might help students eliminate the need for private loans, Toney said.

Students who get any type of financial aid should start learning about the process and investigating their options as early as they can, Widney said.

"Our phone lines and our walk-ins jump astronomically two to three weeks before the bill is due," she said.

Reach Alison Knezevich at alis...@wvgazette.com or 348-1240.