Students and parents have had to search harder, wait longer, pay more, and–in at least a few cases–post pleas for funding on the Web. But most of the nearly 9 million education borrowers this fall appear to be getting the loans they need.
At least 130 lenders, including big banks such as Washington Mutual and Wachovia, shut down some or all of their student lending departments this year. Quick fixes by Congress appear to have stanched the exodus of lenders and freed up cash for borrowers. "We are not aware of any students whose borrowing difficulties have blocked their ability to enroll," says Bob Cohen, spokesman for the Career College Association, whose membership of for-profit trade schools lost the most lenders of any type of college. "Without Congress stepping in, the crunch would be a crisis," he added.
Students who can’t cover their tuition bills from their savings are benefiting from the newly raised maximums on the amount they can borrow through the federal Stafford program. This spring, Congress raised the ceiling by $2,000 to at least $5,500 (but upperclassmen and adults can get more). Congress also trimmed a little off the Stafford costs, setting the top Stafford annual percentage rate this year at 7.25. Those who qualify as needy or who find lenders willing to offer discounts can borrow for as little as 6 percent. Read full story.
(US News & World Report)