DOE Plans “Emergency Survey” of College Loans
Posted 02 May, 2008
If you aren’t aware of the major changes sweeping the student loan market-and how they could affect your family–read on!
Over the past few weeks, the highly desirable federal student loans from private lenders-who tend to offer favorable rate discounts–have become harder to come by. The combination of the unstable credit markets and the effects of the College Cost Reduction and Access Act of 2007 has made federal lending much less profitable for private lenders, and as a result many of them are withdrawing from the market.
Testing the Waters
With the federal student loan market in upheaval-dozens of private lenders have withdrawn their support so far, and the numbers change daily-the Department of Education (DOE) is reasonably concerned about the
ability of U.S. students to secure student loans for the upcoming school year.
Over the past few weeks they have queried those colleges who used the 50+ private lenders who have dropped the federal loan program to ensure that they have other lender options. They are also planning an “emergency survey” to make certain that any college not using the Direct Lending program (in which the government itself makes the loans) can maintain access to student loans.
Our Own Survey
When serious issues with student loans became very apparent at the beginning of this month, our office started an independent survey of 50 top private lenders who had previously offered federal student loans. Our findings were disheartening-some lenders are lowering or eliminating discounts, and a surprisingly large number of them have decided not to offer federal loans at all.
Next Steps for Your Family
While the federal loan market isn’t as favorable as it has been in years past, students should still be able to obtain a federal loan if they need to. (It is the credit-based, private student loans that may potentially difficult to secure.) My recommendations are much the same as usual for this market:
- Try to use any other funding options before taking on debt,
- Take out federal student loans before private loans,
- Do your research so you get the best borrower incentives, and
- Understand all the terms of any loan you or your student borrows.
Watch for my appearance on ABC World News Tonight with Charles Gibson next week as I discuss how the current state of the credit markets is affecting families who rely on education loans to pay for college.
And one more thing-stay on top of important news by reading my blog and subscribing to my free, info-packed newsletter! (The sign up box is at the top left, and you won’t receive any spam from us-promise!)
Have questions or want to share your own thoughts on student loans? That’s what the comment section is for! : )
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding, a nationwide company that helps families find creative ways to reduce their college costs.
photo: Water drops by Grego01
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If you aren’t aware of the major changes sweeping the student loan market-and how they could affect your family–read on!
Over the past few weeks, the highly desirable federal student loans from private lenders-who tend to offer favorable rate discounts–have become harder to come by. The combination of the unstable credit markets and the effects of the College Cost Reduction and Access Act of 2007 has made federal lending much less profitable for private lenders, and as a result many of them are withdrawing from the market.
Testing the Waters
With the federal student loan market in upheaval-dozens of private lenders have withdrawn their support so far, and the numbers change daily-the Department of Education (DOE) is reasonably concerned about the ability of U.S. students to secure student loans for the upcoming school year.
Over the past few weeks they have queried those colleges who used the 50+ private lenders who have dropped the federal loan program to ensure that they have other lender options. They are also planning an “emergency survey” to make certain that any college not using the Direct Lending program (in which the government itself makes the loans) can maintain access to student loans.
Our Own Survey
When serious issues with student loans became very apparent at the beginning of this month, our office started an independent survey of 50 top private lenders who had previously offered federal student loans. Our findings were disheartening-some lenders are lowering or eliminating discounts, and a surprisingly large number of them have decided not to offer federal loans at all.
Next Steps for Your Family
While the federal loan market isn’t as favorable as it has been in years past, students should still be able to obtain a federal loan if they need to. (It is the credit-based, private student loans that may potentially difficult to secure.) My recommendations are much the same as usual for this market:
- Try to use any other funding options before taking on debt,
- Take out federal student loans before private loans,
- Do your research so you get the best borrower incentives, and
- Understand all the terms of any loan you or your student borrows.
Watch for my appearance on ABC World News Tonight with Charles Gibson next week as I discuss how the current state of the credit markets is affecting families who rely on education loans to pay for college.
And one more thing-stay on top of important news by reading my blog and subscribing to my free, info-packed newsletter! (The sign up box is at the top left, and you won’t receive any spam from us-promise!)
Have questions or want to share your own thoughts on student loans? That’s what the comment section is for! : )
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding, a nationwide company that helps families find creative ways to reduce their college costs.
photo: Water drops by Grego01
Subscribe in a reader
Subscribe by Email
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