Access College Loan

Now the credit crisis is spilling over into college-student loans.

Sallie Mae, the nation's largest lender to college students, will no longer make private education loans to students who are higher credit risks, so-called subprime borrowers. Private student loans, which carry higher interest rates than federal loans, help bridge the gap between tuition costs and federal aid.

Sallie Mae's change will hurt for-profit education companies because they rely on students' access to private loans more than non-profit colleges and universities, student-loan experts said. On Tuesday, a number of education stocks, including Hoffman Estates-based Career Education Corp., experienced big sell-offs on fears that the schools could see a decline in enrollment.

Ask Noel

My husband bought an investment property in 2003 for $182,000 with a mortgage of $160,000; the property is now worth $330,000. In 2004 we bought a family home for $385,000 with a mortgage of $300,000. The value of our family home is still steady and not increasing like our investment property. We are planning to get a $180,000 business loan within the next two years. Is there any way to get the business loan without selling any of our properties?

Your total equity in the properties is about $255,000, so you will be pushing to get an additional loan of $180,000 from your bankers unless you can show the business you are buying has a very good cash flow. I suggest you pour all your resources into reducing the non-deductible debt on the family home, so you will be in a better position when the time comes to apply for the business loan.

Debt And Your Taxes

This makes debt management more important than ever, because you are basically penalized by the IRS whenever you have interest that falls into the nondeductible category. Here's a quick summary on when you get a tax break for borrowing and when you don't. .