Big changes came to the bigger 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 locate that they had to scramble to locate new lenders willing to service their student loans.
CampusDoor, students lender that has been backed by the failed Lehman Brothers, had to see students that the private loans they had been approved กรอ for would not be funded. According to Sallie Mae, 70 private lenders have left the student loan market in 2008. Some of these lenders have suspended business in the bigger education loan market and others have suspended loan programs with colleges which they consider to be always a high risk, however, many lenders have gone out of business all together.
Here’s things you need to know to have the money you need to complete your educational goals:
Help is on the road
* The U.S. Senate passed the Ensuring Continued Access to Student Loans Act that will enable the Secretary of Education to purchase loans from private institutions. This move should increase the liquidity of those lenders, letting them loan additional money to students.
* The Ensuring Continued Access to Student Loans Act also changes the terms of repayment for PLUS loans. Underneath the current terms, parents must begin repayment 60 days after the disbursement of funds. In the years ahead, parents will have the choice of deferring repayment for up to 6 months after students leave school.
* The newest act also escalates the loan limits on fixed rate, no credit check Stafford Loans. This move was targeted at helping students save money by foregoing more expensive private student loans.
Creditworthiness is vital
* 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 think about with the rising cost of tuition. If there isn’t good credit, you could have to find a co-signer.
Complete the FAFSA to qualify for the most of the financial aid available for your requirements
* Higher education loan eligibility is determined based upon the data included in the FAFSA or Free Application for Federal Student Aid.
* Completing the FAFSA will help to determine your eligibility for grants scholarships and work-study as well as student loans. Broadening your financial options is likely to make more funds readily available for education expenses.
* Be sure to contact a financial aid adviser at the college or career school that you plan to attend. Schools are required to see you of their financial aid procedures and deadlines. They can also inform you of other kinds of financial aid, such as for example state programs of school based scholarships.
Understand that the unprecedented financial crisis affecting the bigger education loan market is consistently fluctuating. The simplest way to make sure that you’ve the funds that you might want will be informed of the changes and how they affect your financial goals.