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 the banks have had to curtail their student loan numbers is the current difficulty in raising money for lending. Because they cannot raise funds to the same degree as before the credit crisis, they do not have the money to lend.
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.
By far the best option for student loans is the federal student loan scheme. These loans have low fees, low interest that is fixed and is paid while you are studying. These government backed loans are available to all students regardless of their background or credit rating, and not dependent on the college they attend.
But there are students at community colleges that cannot access these cheap loans. Why? Because some of the community colleges do not support the federal scheme and this means their students cannot get the loan. These students have to make other arrangements to pay for their college tuition and expenses, and are often left with no other option but expensive private loans or credit cards.
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 the banks have had to curtail their student loan numbers is the current difficulty in raising money for lending. Because they cannot raise funds to the same degree as before the credit crisis, they do not have the money to lend.
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.
By far the best option for student loans is the federal student loan scheme. These loans have low fees, low interest that is fixed and is paid while you are studying. These government backed loans are available to all students regardless of their background or credit rating, and not dependent on the college they attend.
But there are students at community colleges that cannot access these cheap loans. Why? Because some of the community colleges do not support the federal scheme and this means their students cannot get the loan. These students have to make other arrangements to pay for their college tuition and expenses, and are often left with no other option but expensive private loans or credit cards.
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.
About the Author:
Over at Student Loan Guru, we answer Student Loan questions from real College Students around the Nation. Whatever your question, odds are we can answer it. For example, one of the most common questions we hear is the question about paying back student loans. You will find these and other answers at our site.
0 comments:
Post a Comment