The credit crunch may have an impact on the availability and cost of student loans for college.
Students and their parents often turn to private lenders when they don't quality for or miss out on federal student loans. Loans from private firms carry higher interest, often variable rates because they are not federally secured. The worsening credit situation is pushing some of those private lenders to either get out of the business or cut back because finding investors willing to buy the debt has become more difficult.
Sallie Mae, which is the largest student loan lender in the country, is tightening credit requirements for those who want to borrow. It is also going to stop lending to those who attend some community college and career schools.
Federal student loans, such as Stafford Loans, not only have maximum annual limits on how much can be borrowed but may also be impacted by a Congressional cut in subsidies.
The news is not all doom and gloom. The federal Department of Education says it is working with colleges to make sure federal loan help is available.
College Loan Shopping
The College Board has some advice for those who will need help to pay for college:
1.Think before you borrow. Determine what your expenses will actually be.
2.Avoid loan traps. You're not committed to the loan amount you're approved for - don't borrow more than you need. Go for the loan with the best terms, which generally means the one with the lowest interest rate.
3.Apply for scholarships and grants. Consider part-time work and living at home as options to reducing the cost of college.
Source:-http://www.news10.net/display_story.aspx?storyid=39094 |
Students financial aid