Student Loans in a Pinch
January 23, 2008
The effects of the sub-prime housing market mess are expected to bleed over into other sectors as time passes and one sector, student loans, is seeing some of that happen now. According to a recent report released by the financial aid expert, FinAid, college students may soon see trouble with getting new student loans.
It was assumed not too long ago that the student loan problems would hit those who were also sub-prime borrowers the most. That assumption is now proving to be somewhat invalid. Most experts agree that all college students will find it harder to the loans as lenders begin to tighten up on credit standards across the board.
Two of the most important issues that those needing student loans in the future will face are:
It is likely that most lenders will increase interest rates on their student loan products. The amount of the increase will vary from lender to lender, making it that much more important to shop around for the best loans.
The second issue that many student loan borrowers are likely to face is the requirement for higher credit scores in order to qualify for the best loan products.
Government-back college loans are not exempt. Sallie Mae recently notified the SEC that it also plans to increase its lending standards as well.