Last-Minute Student Loans Are Still Available

Students and parents have had to search harder, wait longer, pay more, and—in at least a few cases—post pleas for funding on the Web.

At least 130 lenders, including big banks such as Washington Mutual and Wachovia, shut down some or all of their student lending departments this year. Quick fixes by Congress appear to have stanched the exodus of lenders and freed up cash for borrowers. "We are not aware of any students whose borrowing difficulties have blocked their ability to enroll," says Bob Cohen, spokesman for the Career College Association, whose membership of for-profit trade schools lost the most lenders of any type of college. "Without Congress stepping in, the crunch would be a crisis," he added.

Students who can't cover their tuition bills from their savings are benefiting from the newly raised maximums on the amount they can borrow through the federal Stafford program. This spring, Congress raised the ceiling by $2,000 to at least $5,500 (but upperclassmen and adults can get more). Congress also trimmed a little off the Stafford costs, setting the top Stafford annual percentage rate this year at 7.25. Those who qualify as needy or who find lenders willing to offer discounts can borrow for as little as 6 percent.

In May, Congress also relaxed the credit standards for parents having mortgage troubles. Although PLUS loans still charge a maximum fixed annual rate of 9.4 percent, this year's versions are more attractive because they allow parents to defer payments until the student leaves school.

Parents with home equity or good credit are also finding reasonable deals. Home equity lines of credit are currently hovering around 5 percent. And employed adults with FICO scores in the 700s can find private loans below 7 percent. The rates on those alternatives are at a higher premium over benchmarks than they were last year and are variable, notes Student Lending Analytics; they are likely to get pricier when interest rates return to their historical norms.

Nonprofits. Best off are students or parents in states where nonprofits were able to get funding, such as North Carolina and Texas. "Last year, we turned people away," says Dan Weaver, assistant commissioner of the Texas Higher Education Coordinating Board, about Texas's alternative education loan charging a maximum fixed APR of 7.1 percent. But thanks to increased funding, the state still has more than $50 million ready to lend to Texas residents, he says.

Colleges propose student loans instead of new fees

A radical plan for a 'deferred loans' scheme for thousands of students has been drawn up by university heads, the Irish Independent can reveal.

Under the plan, students would start to pay back the 'loan' within a few years of graduation, after they have reached a certain salary level.

It will be put to Education Minister Batt O'Keeffe as an alternative to the straightforward return of tuition fees when university chiefs meet him tomorrow.

The 'income contingent loan' would pay for part of undergraduate third-level education which, at the moment, is paid entirely by the State.

Students would have the option of either availing of the 'deferred loan' or else paying what would be known as 'top-up' fees up-front when they enter college.

Reduction

No figure has yet been put on the amount of the top-up fee but it would not cover the full economic cost of a course and would likely be of the order of €3,000 or €4,000.

The proposal is basically a variation of the arrangements that exist in the UK where students get a reduction if they pay the fees up-front when they register for university.

Much of tomorrow's meeting will be spent discussing the current funding arrangements for the universities and the effect of cutbacks.

Ireland's seven university heads will point out that the institutions are now at a 'tipping point' and that the likely impact of the reduction of State funding would include:

l Closure of some courses.

l Larger classes and lectures.

l Reduction in student support services.

l A gradual erosion in the quality of the learning experience.

Mr O'Keeffe has stated publicly that the universities have seen their funding increase by one third over the past few years, and that he wants to ensure value for money.

But the universities are expected to point to the recommendation by the international think-tank OECD which called for a 'quantum leap' in funding for higher education.

They are expected to press for clarity on the funding of higher education. One of their concerns is ensuring that, if fees are introduced, State grants will not be cut accordingly.

Crisis

But they are likely to point out that no matter what new scheme is agreed, colleges are still facing a crisis.

They will also argue that a deferred loans scheme is fairer and that it is justifiable on the basis that graduates have a higher earning 'premium' than non-graduates.

No More Hurdles In Your Education

Curious and serious enough to build up a successful career? For achieving a successful future and bright career you must be well educated. Presence of education has become so immense that nowadays without it no one is regarded as capable of doing anything. However, for a better and higher education you must have money otherwise affording education in best institutes is impossible. For economically weak students several plans have also been undertaken which aims at making them self-dependant both financially and mentally. Among these the Personal Education Loans are one and are quite helpful to all.

Based on the ability of the students these loans use to offer secured and unsecured two forms of loans. This is because borrowers can be of several types. Those who have their own home or any other valuable property to offer as collateral will go for the secured loans. As these loans seek collateral from the borrower so, it will beautifully suit such borrowers. Even you would get to enjoy several benefits by going for it. Lower interest rate, large amount and longer repayment term are the factors that are being offered to such borrowers. Therefore, people like to go for these loans mostly.