Poor Economy May Keep You From Getting A Student Loan

By Ronaldo Q Cacheezey

The global credit crisis and decreasing money available for borrowing are affecting another area for financially strapped families. Student loans for US students wanting to attend college have traditionally been accessible, but it seems as though this reliable source of funds may be getting shut down. Student Loan companies, which used to dish out student loans under the Federal government backed student loans, are finding this is not profitable enough for their bottom line in the current state of the credit institutions.

It's been reported that a state agency has quit a loan program that serves borrowers. This will affect 100 universities and colleges and there are fears that other agencies and colleges may follow the same path. The reason given was the disruption of capital markets.

Some funds for college,loans for students has traditionally been supported and provided by some of the largest banks like Citibank, JP Morgan and Goldman Sachs. They have ceased supporting the low-risk security that education assistance have always been behind. On top of this, financial experts are predicting that funds will start to become more expensive, putting extra strain in this area.

One of the main sources of credit to students has always been the federal government backed financial assistance, which provides funds to means-tested students. Many students find that this loan only covers tuition and they then need to take out a further private loan to cover other expenses. These are the very loans that are tipped to disappear, although it seems as though lenders are standing by their obligations under the federal backed program.

The main effect of this problem will be felt by low income families and those with a poor credit rating. There are parents who have been negatively affected by the mortgage crisis who have college aged children. These young people could find themselves disallowed by loan providers because of the parents' low credit score.

It has been estimated that about 100,000 students will not qualify for private or government loans this year due to poor credit. Add to this the decreasing number of companies providing student loans, and there will be problems for many college students.

A Student needing financial aid should visit the counselor at the school of their choice. These counselors may be aware of scholarships or grants that are not widely known about. They also are a source of little know student aid that Students or Parents with poor credit may qualify for.

Should all your attempts at securing a traditional student loan fail, then it's important to start researching unconventional ways such as scholarships, grants or small loans. In the end, a financially poor Student may have to get an education the old fashioned way...by getting a job and paying for it yourself.

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They have tightened down the student loan lending for sure. Hope the economy turns around quickly to allow for better financing.

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