WHITTIER : Rio Hondo to Initiate Direct-Loan Program

Rio Hondo Community College will begin granting students direct loans next year, replacing banks as the primary lenders of federal financial aid.

UC Irvine and Caltech began pilot direct-loan programs July 1. The Rio Hondo program will start July 1, 1995. The college will screen applicants in January before sending loan requests to the federal government for acceptance.

The current procedure requires college officials to certify loan applications before forwarding them to students’ choice of national banks for approval. The banks issue students checks that are subsidized by the federal government.

The new system will be implemented at 1,174 campuses nationwide in 1995.

“It was done primarily to save money because it will cost the (federal government) less,” said Daniel Rubalcava, the college’s financial aid director.