The Oncoming Student Loan Crisis
Will current economic woes affect my student loan?
How the Government is Trying to Prevent the Student Loan Crisis
Should I Let My Student Loans Go to Collection?
Student Loan Lenders Dropping Like Flies
How Does the Plight of Student Lenders Affect My Existing Loans?
My Federal Student Loan Doesn’t Cover the Entire Cost of My Education
One of the main questions on many new students’ minds is whether or not they’ll be able to get a student loan to attend college. Student loans are a necessity for many people and a financial aid drought could keep thousands of students from attending college or force them to attend a less expensive school. It’s a real concern, despite the fact that the US Department of Education seems to be all but ignoring the possible problem. Currently, the Department of Education is said to be closely monitoring the situation, but has seen little proof that students will be unable to get federally guaranteed loans from private lenders this year. Still, that doesn’t provide much relief to people who wake up to read about investors completely dropping out of the student loan program.
Investors who have usually bought the loans in bundled lots have seemingly shied away from the market entirely. With the economic credit crunch and cuts in federal subsidies, more than 30 private lenders have stated that they will stop offering Federal Family Education Loans. Providing loans to nearly 8 million students at almost $92 billion, the Federal Family Education Loan program or FFEL is the largest source of financial aid in the United States. This is the primary source of concern for most people as these lenders supply billions of dollars and make up the largest source of financial aid.
The US government and Department of Education are well aware of the growing concerns about a possible student loan crisis and have recently begin to publicly outline a plan of action to avoid future problems that may arise. For the first time ever, the government may be forced to rely on a last resort or emergency loan system. Should the FFEL program continue to lose private lenders, there are plans to expand the capacity of the direct loan program, which allows students at participating schools to borrow money directly from the government. There’s also legislation in process that would allow the Department of Education to buy student loans from lenders in need of new capital. With these and other preemptive measures being taken, it’s probably safe to say that a major student loan crisis will be averted in the United States.
