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The Recession-ized Loan Guide
The loan market has changed and it will affect your student loans.
By Kathryn Knight
April 21, 2009
You have to be completely oblivious to not know about the barrage of bailouts by the federal government by now. Unfortunately though, there is no news on a possible student loan bailout. So for now, students need to simply get smart on future loan opportunities. Even though you’re already in school, it’s not too late to get more help.
Federal Student Loans
As of right now, the federal government is vowing that the federal student loan market will remain unaffected by the current financial climate. The only thing that will increase is the number of families applying for federal student aid. Students already in school need to seriously consider the benefits of either filling out the Free Application for Federal Student Aid (FAFSA) for the first time or renewing their FAFSA to note any changes.
Filling out or renewing the FAFSA allows students to participate in student loan programs. While these programs may or may not be included in a student’s initial financial aid package from a school, there are several federal education loan programs that are available to everybody, even wealthy families. Though most families prefer that their children not take out loans, these economic times leave many families without a choice. Federal student loans are the best bet because they offer interest rates as low as 5%. The most widely-used student loan, the unsubsidized Stafford loan, has a 6.8% interest rate.
So long story short…fill out or renew the FAFSA and talk with your college’s financial aid offices for federal student loan opportunities and other student aid options.
Private Student Loans
More than 45 private student loan lenders had dropped out of the market, and that number is expected to increase. Students that are in dire need of new monies to help finance their education should use private lenders as a last alternative rather than a first. The federal loans are less expensive and more available than private student loans.
Peer-to-Peer Lending
A great alternative to seeking out private loans is to simply ask your peers for money. Peer-to-peer lending sites are cropping up all over the internet. They provide students with a legitimate outlet to borrow money from family and friends at a low interest rate. Additionally, the sites help students formulate a repayment plan. So, rather than getting an envelope from Grandma signed with x’s and o’s and a pinky promise to pay back, students can borrow through a more formal process. Check out FinAid’s guide to peer-to-peer education loans for more peer-to-peer lending information.


RobynMM
3 days ago
Thanks I seen this on the news!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Judith923
4 days ago
i am a sophmore at utpb, does anyone know anything about a state grant called tassa it is the same as the fasfa, if anyone has info on it please let me know thankyou
Ache_Miki
6 days ago
Michael Achankeng. I am in my second year in Potomac College, Washington DC studying very well with a GPA of 3.5. Indeed, I will be very grateful if you could help me find a good scholarship to subsidice my living expenses. I am determine to study well and improve on my GPA. I like studying but facing a lot of financial difficulties.
AbdulKadiriM
8 days ago
Thank you for these means to happen first we will thank God and second to who make it happen Thank the lord Amen,
jameslawson
8 days ago
I am 50 yrs old and going back to school, currently with Ashford University Online for Organizational Management and seeking a tutorial position with hotel/restaurant management
heather5263
9 days ago
how likely is it that i will get the scholarships i fill out?
CarmelloAnthony
10 days ago
Chris kaman 4 life
CarmelloAnthony
10 days ago
woopata
ElizabethM973
11 days ago
i am a sophmore in high school. how should i go about this business of getting scholarships and loans./ what should i do.
milton42
15 days ago
Peer-to-Peer is definetely the way to go if you use some of the better sites for it, and their not all for education exclusively.
chris17hdz
15 days ago
i dont lke tht bar neither
sleung418
17 days ago
Interesting...
kmaltos
18 days ago
How do you get rid of the annoying bar?
Oneof450
19 days ago
get rid of the bar, It is in the way.
VictoriaM770
20 days ago
life is sooooo unfair!!!!!!!!!!!!!!!!!