College loans not immune.
STUDENTS GOING THROUGH the college application process, in addition to students already enrolled in college, are also running scared due to private lenders pulling out of college loan packages.
"Spawned by the subprime mortgage crisis, private lenders are leaving at an alarming rate," says Dave Kenney, the CEO of CollegeZapps, a Web site that provides an easy way for students to fill out college applications. "It may not seem like it makes sense--with the prospect of students graduating in four years and getting jobs--but default rates are increasing across the board."
Congress did act over the summer to provide guarantees to financial institutions for their federal loan programs, which increased the average student federal loan from $2,000 to $5,000, says Phil Day, president of the National Association of Student Financial Aid Administrators.
But many students--close to half, says Kenney--rely on private loans to augment their federal loans in order to attend expensive universities.
The federal loan programs are cheaper and have better repayment options than those of private lenders, says Kenney, which require a cosigner and are increasing their fees and costs.
Kenney recommends that students apply to at least eight to 10 schools to increase their options for financial aid upon admittance, and to look into individual college scholarship programs as well as scholarships from their local community.
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|Title Annotation:||News Update|
|Article Type:||Brief article|
|Date:||Nov 1, 2008|
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