Ways to get student loans in tough economy
6:54 p.m. Wednesday, October 1, 2008
There's no doubt the financial crisis is taking its toll on citizens.
People are losing money, jobs, homes, and loans are hard to come by, especially student loans.
“This is complicated and confusing,” said Robert Weigand, Washburn University finance professor.
Weigand said banks are hoarding cash just in case there's another crisis.
He said there's some evidence banks may be using the credit crisis as an excuse to raise interest rates on student loans and credit cards.
“This is another example of how the average citizen really feels the bite of the credit crisis,” he said. “So when we say we're going to pay with a bailout plan through future taxation, that's one negative for the average citizen.”
So what do you do if you're a college student or you're planning for college?
Weigand said you should talk immediately with potential lenders and ask them how the credit crisis may affect your availability of student loans.
The best place to start is with your local bank. Lay out your future plans and make sure you understand the terms of your loan's interest rate.
If you can’t get money from your bank, go to the financial aid office for professional help, and don't be afraid to sit down with a financial planner.
“They're very good at listening to your long-term needs and matching a borrowing plan that will help you achieve your goals without saddling you in debt,” Weigand said.
Unfortunately, he said some students will be shut out of the student loan program that wouldn't have been if the economy was better.
“If circumstances dictate it needs to take 12 to 18 months longer to complete your degree, this is not a reason to drop out of school or defer your college plans,” he said.
Weigand anticipates the average college student will have to take less hours, work more and plan ahead to make ends meet until the economy becomes stable.
Comments
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Oct. 2, 2008 at 11:07 p.m. (Suggest removal)situveux1 (anonymous)
I think you need to talk to another financial guy. Stafford Student Loans, whether subsidized or un-subsidized are guaranteed by the government and their availability is in no way affected by cash flow of private banks.
Get a clue 49!
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