Banking institutions are reducing the number of colleges they provide student loans to and most of those cut are community colleges. It seems as though those attending the expensive, elite colleges will continue to have access to student loans. It would appear that college education is being split by the lack of availability of student loans to some students.
The reason behind the decision of the financial institutions is the current global credit crisis. Because it is harder to raise money, the banks do not have the funds to lend and so they have to cut down on the loans they offer.
On a brighter note, there are other lenders who claim they will continue to offer loans to all college students. Companies such as Nelnet and Sallie Mae have recently committed to continuing with the Federal government backed scheme and will lend to students attending any college. This is good news for those attending community colleges.
For students looking at different types of student loans, the best option is the federal scheme. These are low interest loans that offer interest fixed and paid for by the government for the duration of your course. These federal loans are available to all college students, attending any college, from any background, with any credit history.
If this is so, then why are some community college students unable to get one of these student loans? It appears that there are some colleges that do not participate in the scheme, and this disqualifies the students from the loans. These students are forced to resort to other, more expensive, methods of finding money to pay for their college education - and they are often the ones who least can afford this.
Lenders claim that community college students have a greater risk potential; but instead of denying them cheaper federal loans and possibly creating a greater debt problem by forcing them to find alternative funding, the schools should offer guidance in repayment options, to make federal loans a safe option for lenders.
The reason behind the decision of the financial institutions is the current global credit crisis. Because it is harder to raise money, the banks do not have the funds to lend and so they have to cut down on the loans they offer.
On a brighter note, there are other lenders who claim they will continue to offer loans to all college students. Companies such as Nelnet and Sallie Mae have recently committed to continuing with the Federal government backed scheme and will lend to students attending any college. This is good news for those attending community colleges.
For students looking at different types of student loans, the best option is the federal scheme. These are low interest loans that offer interest fixed and paid for by the government for the duration of your course. These federal loans are available to all college students, attending any college, from any background, with any credit history.
If this is so, then why are some community college students unable to get one of these student loans? It appears that there are some colleges that do not participate in the scheme, and this disqualifies the students from the loans. These students are forced to resort to other, more expensive, methods of finding money to pay for their college education - and they are often the ones who least can afford this.
Lenders claim that community college students have a greater risk potential; but instead of denying them cheaper federal loans and possibly creating a greater debt problem by forcing them to find alternative funding, the schools should offer guidance in repayment options, to make federal loans a safe option for lenders.
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