| Rules for student loans get tighter
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.
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NIAGARA COUNTY: NCCC students above SUNY loan default average
The nationwide trend toward increased student borrowing has not passed over Niagara County Community College, where the default rate on student loans is above the state average for similarly sized schools.NCCC officials caution, though, that there are several outside factors weighing into that and that steps are being taken to correct the situation.In a September memo pertaining to the creation of a new position, NCCC Vice President Bassam Deeb wrote that NCCC's default rate is above the average for the overall SUNY community college system.That's true, said NCCC public relations director Lou Paonessa, but the issue isn't a simple one. NCCC's students default at a rate of 10.7 percent for all types of loans, but Paonessa said many of those are alumni who continue their education at a four-year institution and default on those loans.Then there's the local economy."Part of it is our economic area," Paonessa said.
Student Loans Demystified
FINANCIAL AID is quickly becoming a synonym for student loans. These days close to half the students in four-year colleges take out loans and it's a rare student that isn't confounded by the process. This section should help to clear up some of the confusion. The three most common government-sponsored education loans are called Stafford loans, Perkins loans and Plus loans. .
A Financial-Aid Bias?
The financial-aid determination process is pretty much a black box. You put your data in, whether on the Free Application for Federal Student Aid (FAFSA) form handled by the U.S. Education Department or the College Scholarship Service (CSS) form processed by the College Board, send along last year's tax forms and out the other end come scholarship and loan packages from the colleges that have accepted your child. How those numbers are determined is up to each school's own financial-aid office. But there's a surprising degree of sameness in the way these offices operate and in the lack of explanation they provide to parents. And it's no wonder they look so similar: They are all using the same playbook. The College Board, a membership organization of most colleges and universities in the country, claims it doesn't tell schools how to evaluate financial need.
June 2006
The average college graduate leaves school with almost $20,000 in student loans and $2,000 in credit card debt, notes the Chicago Tribune in a Sunday financial piece. And parents, who do not qualify for financial aid and have little tuition reserve, are often left with $50,000 or more in debt for each graduate. Ante up the cost of three or four kids and the sum gives new meaning to the term: mid life crisis. There is no relief in sight for the next generation. With the outlay of a college education expected to increase at five percent a year, the average annual cost of a private college in 15 years is pegged at $51,664. Factor five percent a year to the already nose bleed cost of sending a child to Harvard, MIT, Boston College or Boston University, and you’re bracing for an annual expense of $90,000 by 2017.
Bucking the Tide on Private Loans
As the scandals and debates over private lending have grown in recent months, conventional wisdom has held that private loans are a necessary evil. Sure, students and their families are taking on debt that is typically more expensive and more risky than federally backed loans. But as long as families feel that college costs are otherwise beyond their reach, private loans will continue to become more popular. .
How to make mountainous student debt less huge
There's student loan debt. And then there's student loan DEBT. The former is the $20,000 in loans of the typical college graduate. The latter is four or six times that amount, typically racked up by those attending grad school at an elite university or medical school. .
Mo. student loan agency forgives loans for 510 teachers
Those covered in this most recent effort have federal Stafford loans and are either first-year teachers or provisionally certified to teach math, science or special education.
MOHELA, over the next two years, also plans to forgive many Stafford loans for engineering and pre-engineering students who live in Missouri.
Gov. Matt Blunt has used more than $300 million from the loan authority to pay for college construction projects. ©2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. .
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