About 3,500 students who have federal loans will soon feel the effects of the currently unpredictable federal and private loan market as early as this summer, a financial aid officer said.

Some lenders have dropped out of the loan market, causing students to seek different lenders for next fall, said Mike Scott, director of scholarships and financial aid.

“This is the worst situation we have seen in the 10 years I have been working with loans,” said Melet Leafgreen, assistant director scholarships and financial aid.

Earlier this year, congressional actions led student-loan companies such as Sallie Mae and College Loan Corp. to either quit or make changes to loan programs. The College Cost Reduction and Access Act, signed by President Bush on Sept. 27, 2007, stated that money would be cut from the federal loan market.

However, in the bill, $20 billion in new aid will increase the maximum value of the Pell Grant scholarship and reduce the pressure of college costs on the shoulders of low-income and minority students, said Melissa Wagoner, spokeswoman for Sen. Edward M. Kennedy, D-Mass., in February. Kennedy is chairman of the U.S. Senate Committee on Health, Education, Labor and Pensions and sponsored the bill when it was enacted.

As of March 1, CLC left the federal loan market and stopped providing Federal Family Education Loans. It has become difficult for “mid-sized” corporations like CLC to compete in the federal loan market, said Joanna Acocella, CLC’s chief communications officer, in February.

So far, there are five students who will be receiving e-mails stating they must switch lenders because of CLC’s drop out from the federal loan market, Leafgreen said.

Within the next 18 months, students could see a situation in which there are not enough lenders in the federal and private loan market, Leafgreen said.

Scott said the bigger changes in the loan market are seen in private loans. Students’ credit requirements are becoming more difficult to reach, he said.

The university recently removed CLC from the suggested list of federal lenders, Leafgreen said, but it will remain on the suggested list of private lenders. The suggested lenders lists were created by financial aid officers and administrators to highlight lenders that have good benefits and work well for TCU students, Leafgreen said.

Scott said students will not have issues accessing loans, but borrower benefits will not be as good as they used to be.