Financial Crisis Hits the Higher Education Loan Market - What Students Need to Know

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Financial Crisis Hits the Higher Education Loan
Market - What Students Need to Know
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• Big changes have come to the higher education
  loan market as a result of the Wall Street melt
  down. Long before the pyrotechnics of failing
  lending institutions and government bailouts,
  many students have felt the credit crunch as they
  returned to school to find that they had to
  scramble to find new lenders willing to service
  their student loans.

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• Some of these lenders have suspended business in
  the higher Education Loan Eligibility market and
  others have suspended loan programs with colleges
  that they consider to be a high risk, however,
  many lenders have gone out of business all
  together.

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Here's what you need to know to get the money you
need to complete your educational goals

• Help is on the way
• The U.S. Senate passed the Ensuring Continued
  Access to Student Loans Act that will allow the
  Secretary of Education to buy loans from private
  institutions. This move should increase the
  liquidity of these lenders, allowing them to loan
  more money to students.
• The Ensuring Continued Access to Student Loans
  Act also changes the terms of repayment for PLUS
  loans. Under the current terms, parents must
  begin repayment 60 days after the disbursement of
  funds. Going forward, parents will have the
  option of deferring repayment for up to 6 months
  after students leave school.
• The new act also increases the loan limits on
  fixed rate, no credit check Stafford Loans. This
  move was aimed at helping students save money by
  foregoing more expensive private student loans.

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Creditworthiness is very important

• Guard your credit! As lenders work to shore up
  their bottom lines, credit worthiness is
  paramount. Alternative loans, which are credit
  based, may be an option you need to consider with
  the rising cost of tuition. If you don't have
  good credit, you may have to find a co-signer.

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Complete the FAFSA to qualify for the all the
financial aid available to you

• Higher education loan eligibility is determined
  based upon the information contained in the FAFSA
  or Free Application for Federal Student Aid.

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• Completing the FAFSA will help to determine your
  eligibility for grants scholarships and
  work-study as well as student loans. Broadening
  your financial options will make more funds
  available for education expenses.

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• Make sure to contact a financial aid adviser at
  the college or career school that you plan to
  attend. Schools are required to inform you of
  their financial aid procedures and deadlines.
  They can also inform you of other forms of
  financial aid, such as state programs of school
  based scholarships.

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• Remember that the unprecedented financial crisis
  affecting the higher education loan market is
  constantly fluctuating. The best way to make sure
  that you have the funds that you need is to be
  informed of the changes and how they affect your
  financial goals.

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