The downturn of the economy and decreasing money available for borrowing are affecting another area for students. Student loans for US students wanting to attend college have traditionally been accessible, but it seems as though this reliable source of funds may be disappearing. Banks, which used to dole out student aid under the Federal government backed student loans, are finding this is no longer profitable in the current state of the credit institutions.
Word of a state agency pulling out of providing college aid, has surfaced. This will affect 100 colleges and universities alone, and the fear exists that many more will become similarly affected. The reason behind this drastic move is cited as being the credit squeeze.
Student loans are usually supported by some of the major banks, including Goldman Sachs, JP Morgan and Citibank, but they have stopped supporting the normally low-risk securities that money for college traditionally backed. Financial experts are predicting that funds for college will also become more expensive, as well as being harder to access.
One of the main sources of credit to students has always been the federal government backed student funds, which provides funds to means-tested students. Many students find that this loan only covers tuition and they then need to take out a further private loan to cover other expenses. These are the very loans that are tipped to disappear, although it seems as though lenders are standing by their obligations under the federal backed program.
The other area of concern is the growing number of families who have been caught by the mortgage crisis - many will have college-aged children. The people most affected by the disappearance of student loans will be low income earners and people with a low credit score, and families suffering with their mortgages are now included in this group. There will be a growing number of students who will be refused loans due to their parents' credit rating.
The current estimation is that 100,000 students will not qualify for the Federal government or private student loans because of credit rating issues. This, coupled with the reduction in the number of loans actually available, will make attending college difficult for many US students.
For those who are caught between a rock and hard place with this credit crisis, a trip to your schools financial aid department is in order. They will be able to steer you in the right direction to find student aid assistance.
Don't forget, don't lose hope. If you can't get a hundred percent of your college needs financed, you may have to cut back on classes and get a full or part time job and work your way through college. I know, this is an unpopular way of getting help, it's still one of the best ways to come out of College with not student loan debt. - 16747
Word of a state agency pulling out of providing college aid, has surfaced. This will affect 100 colleges and universities alone, and the fear exists that many more will become similarly affected. The reason behind this drastic move is cited as being the credit squeeze.
Student loans are usually supported by some of the major banks, including Goldman Sachs, JP Morgan and Citibank, but they have stopped supporting the normally low-risk securities that money for college traditionally backed. Financial experts are predicting that funds for college will also become more expensive, as well as being harder to access.
One of the main sources of credit to students has always been the federal government backed student funds, which provides funds to means-tested students. Many students find that this loan only covers tuition and they then need to take out a further private loan to cover other expenses. These are the very loans that are tipped to disappear, although it seems as though lenders are standing by their obligations under the federal backed program.
The other area of concern is the growing number of families who have been caught by the mortgage crisis - many will have college-aged children. The people most affected by the disappearance of student loans will be low income earners and people with a low credit score, and families suffering with their mortgages are now included in this group. There will be a growing number of students who will be refused loans due to their parents' credit rating.
The current estimation is that 100,000 students will not qualify for the Federal government or private student loans because of credit rating issues. This, coupled with the reduction in the number of loans actually available, will make attending college difficult for many US students.
For those who are caught between a rock and hard place with this credit crisis, a trip to your schools financial aid department is in order. They will be able to steer you in the right direction to find student aid assistance.
Don't forget, don't lose hope. If you can't get a hundred percent of your college needs financed, you may have to cut back on classes and get a full or part time job and work your way through college. I know, this is an unpopular way of getting help, it's still one of the best ways to come out of College with not student loan debt. - 16747
About the Author:
With today's state of the economy, most students can't find student aid. This is another reason to be careful when considering a student loan consolidation. There are pitfalls and consequences to consolidating your college loans, so be sure that you get good advice before applying for another student loan.
