A Loan With You

A lot has been written lately about the difficulty that students are having in getting student loans. While this may be the case in certain circumstances, the issue has been confused beyond belief by a combination of journalists looking for catchy headlines and a consuming public already baffled by the vagaries of the financial aid process. My theory is that any issue having to deal with finance causes the reading public to turn off so quickly that they are seldom apt to dig for the truth. It just gets too complicated.

The biggest misconception regarding the availability of student loans is that the changes in the private loan market are somehow impacting the guaranteed Federal Stafford Loan process. Any student, enrolled at least half-time who is a citizen or eligible non-citizen and who is not in default of a previous Stafford loan or above the aggregate limits is eligible for student loans. Yes there are banks who have pulled out of the Stafford loan process. However, there are still hundreds of different lenders who are actively participating in the Stafford Loan process. Also, more colleges and universities are switching to the Federal Direct Lending system in which the loan funds come directly from the government.

It is true that in the non-federally regulated private student loan market that lenders are, as in other lending arenas, tightening their restrictions on credit worthiness and other aspects of the loan process. This will most greatly impact financially needy students who are enrolled at higher tuition private colleges. However, many of these students may still have the opportunity to obtain Federal PLUS loans, which are borrowed by the parent. If the parent does not pass a credit check for the PLUS loan, the student is then eligible for additional Unsubsidized Stafford Loan funds.

Simple isn't it? Financial matters rarely are, but you can help yourself by gathering information for financing college early. Stop by the CCSJ Office of Financial Aid and we'll walk you through the process in detail. Be aggressive, let us help you!

CW