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December 14, 2008
Financing College Just Got Harder
In most previous recessions, college students were the least affected by turbulent job markets. This recession is different in that the stock market crash and credit freeze have made many private lenders reduce or eliminate financing for college loans. So, while a college student may not yet be in the job market, they typically need the degree to get them started on the career of their choice. With the credit climate as it is, it has become harder to locate sources of private lending funds.
In addition, many parents are losing their jobs as their investment portfolio funds are being slashed by the merciless stock market dives. Some own homes they find they cannot sell in a tight housing market, or because lenders are being pickier with whom they lend to, and the equity in their homes have dropped to eliminate the possibility of borrowing against it. All this adds up to parents who can't afford to pay the tuition offered by many colleges without some form of outside assistance.
The good news is that there is still financial aide available through the Federal government for students who can show a need for it. In addition, parents can use the PLUS loan program to sign for loan for the student, even when the student themselves don't qualify for private loans. And, many students are simply choosing to downsize their college choices and/or reducing their credit hours to be able to finance the college education through their own resources.
Posted by melissa at December 14, 2008 01:49 PM
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