Monday, March 24, 2008
COLLEGE LOAN AVAILABILITY UPDATE
A couple of weeks ago, much of the media caused a stir (if not a scare) amongst prospective and current college students and their parents, reporting that the credit crunch had also infected the college lending industry, and that many families could face difficulty getting the loans they needed for the upcoming academic year. As is so often the case when it comes to reporting financial matters, the media got it wrong – or, in this case, reported only half the story. What the media was talking about – but did not specify – was that these problems existed in the private college loan industry, which may (though not likely) have a shortfall of monies to lend,bit which certainly will offer less attractive terms then they have in the past, to some borrowers. What they failed to report in these stories was that anyone who’ll need loans for next year’s academic year should be able to get them, since funds for federally backed college loans will be available to anyone who needs them. Indeed, as Sara Martinez Tucker, US undersecretary of state made a point of noting when she was in Boston recently to speak at Northeastern University, the problems in the private college loan sector haven’t affected any federally backed loan programs (such as Stafford and Parent PLUS loans), and gave assurances that federal funds would be available to those who need them for the upcoming academic year.