Planning for Student Loans amidst Financial Slow-Downs

Learn how you can find financial aid and support in spite of troubled economic times
As the market steadily slows, and credit, banks, and loan institutions are forced to tighten their budgets, students and schools express concern about affording community college, especially in light of the rising cost of tuition paired with the plummeting availability of funds. 
 
Andy Rosen, in his article “Students, Colleges Prepare for the Private Loan Slowdown,” further explores this issue in asserting: “Area colleges and students are concerned that it will get harder to bridge the gap between federal financial aid and the total cost of education, as a troubled credit market threatens to make private loans harder to get.” 
 
Since many lenders are becoming increasingly cautious in regards to student loans, intuitions are striving to prepare students with additional tools and resources to obtain funds for school. 
 
Can I Obtain Loans When Attending Community College Next Year?
 
If you’re seeking funds to attend college next year or in the upcoming future, it is still relatively uncertain as to how much support students will have access for tuition costs. Essentially, as Rosen reveals, “Nobody really knows the magnitude of the problem because many students have already secured their financing for this year.” 
 
Since an economic recession has been predicted for quite some time, many students held onto anticipatory savings; however, this may not be the case in the upcoming semesters over the course of the next few years. As a result, “It is less certain what is going to happen next year, when students begin to look for ways to pay for their education around March. Private student loans are part of a collection of financial aid sources. The largest of these are federal grants and loans, which have not been as severely affected by economic pressure.” 
 
These grants and loans also derive support from state assistance funds, in addition to support from colleges and other private sources.  
 
Assisting Students: Merit vs. Need
 
Last year, the College Board reported that students obtained $14.5 billion in private loans between 2006 and 2007. This represented tremendous growth in private sector loans, increasing nearly eightfold in the last 10 years. While $112.8 billion of total aid was obtained, the amount of private funding is growing in prevalence.  
 
As many students depend on private loans to pay for tuition costs, some private and community institutions are shifting their traditional allotment of funds from a merit-based distribution method to a need-based distribution. As Rosen explains, by focusing on providing funds and loans to students in high-need, schools would be “directing more money to students based on their family income rather than their academic achievement.”
 
For students who are considered to be high need, they may be eligible for specific federal loan options exclusively for their financial position. As Community College Review reveals in “College Loans,” there are a variety of loan options available for students, as the type of loan can be individually tailored to meet the needs and demands of each student’s lifestyle.
 
Essentially, there are two specific types of loans from the federal government: subsidized and unsubsidized. Subsidized is an appealing loan for many students because the government pays for the interest accrued on the loan. In contrast, while unsubsidized loans can also be deferred until graduation, the student is responsible for paying the interest. 
 
Finding Support and Assistance for Student Loans
 
According to the student support website “Help Me Pay My Loans,” “With some student loan lenders no longer making loans under the federal program that subsidizes and backs low-interest loans, many students are left wondering where to turn for affordable student loans.” 
 
Despite this rising circumstance of budgetary fear, students and families can still seek out financial support to attend college. Students can take advantages of specific tools and resources to find tuition support, such as comparative loan websites likes eStudentLoan.com, or SimpleTuition.com. These sites provide loan finder tools, comparison quotes, and also provide individuals with instant online application opportunities. Here students can discover information about private, federal, and Stafford loans, while also discovering details about which loan-avenue is best for each student’s interests.   
 
Also, many lenders provide students who are specifically enrolled in community college institutions with loans strictly for their 2 or 4 year programs. As Sallie Mae’s loan resource reveals, “The Signature Student Loan is a popular after-Stafford loan. If grants, scholarships, and federal student loans have not covered the total cost of your community college education, the Signature Student Loan can help.” 
 
This Signature loan is exclusively offered to community college students; therefore, many students attending community college courses may be provided with additional tools and resources for their personal benefit. To find out more, students can also visit their community college financial aid / student loan office for further information and details. 
  
References:
 
 
 
Rosen, Andy. “Students, Colleges Prepare for the Private Loan Slowdown, The Daily Record, October 14, 2008, available at http://www.mddailyrecord.com/article.cfm?id=8819&type=UTTM

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