Poor Economy Shuts Out Those Needing Student Loans
at Friday, January 30, 2009
College students in the U.S. are the latest victims as the global credit crisis worsens and financing from banks and other lending institutions dries up. American students who need a student loan to pay their way through college, are starting to have a tough time accessing funds. A large amount of public and private student aid lenders are beginning to quit handing out college aid, causing students hardship in finding student aid.
The list of companies who are no longer offering money is on the increase. One state agency, that has served the student community, has recently announced that it will no longer be offering money for college, leaving students at nearly 100 colleges and universities without cash for money for college.
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 financial assistance traditionally backed. Financial experts are predicting that funds will also become more expensive, as well as being harder to access.
The major source of funds is a federal government scheme in which it backs loans to means-tested students. The money for college are often used for tuition fees and then a further private loan is usually needed to cover general expenses. It is these private loans which will become more difficult to obtain. As yet, there is no evidence to suggest that lenders are failing to support their obligations to the federal loans.
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.
It has been estimated that about 100,000 students will not qualify for private or government loans this year due to poor credit. Add to this the decreasing number of companies providing student loans, and there will be problems for many college 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.
If you wake up and find that you've exhausted your resources, then it's important to start researching unconventional ways such as scholarships, grants or small loans. At the end of the day, a financially challenged Student may have to get an education the old fashioned way...by getting a job and paying for it yourself.
The list of companies who are no longer offering money is on the increase. One state agency, that has served the student community, has recently announced that it will no longer be offering money for college, leaving students at nearly 100 colleges and universities without cash for money for college.
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 financial assistance traditionally backed. Financial experts are predicting that funds will also become more expensive, as well as being harder to access.
The major source of funds is a federal government scheme in which it backs loans to means-tested students. The money for college are often used for tuition fees and then a further private loan is usually needed to cover general expenses. It is these private loans which will become more difficult to obtain. As yet, there is no evidence to suggest that lenders are failing to support their obligations to the federal loans.
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.
It has been estimated that about 100,000 students will not qualify for private or government loans this year due to poor credit. Add to this the decreasing number of companies providing student loans, and there will be problems for many college 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.
If you wake up and find that you've exhausted your resources, then it's important to start researching unconventional ways such as scholarships, grants or small loans. At the end of the day, a financially challenged Student may have to get an education the old fashioned way...by getting a job and paying for it yourself.
About the Author:
As student loans become harder to get, it is critical to think about consolidating your student loans. There are pitfalls to student loan consolidation, so be sure you seek out sound student loan advice before applying for a new college loan.
