Falling housing prices, tougher standards for qualifying for loans, and lenders withdrawing is having an impact on student loans.
President Bush recently proposed that Congress buy billions of dollars in federal student loans to ensure students can borrow what they need for college.
How Much Is Borrowed?
In 2007, students and families borrowed
- $17 billion in private loans
- $60 billion in federal loans
Since private lenders are pulling out of the student loan business because of low interest rates and other factors, Bush want to make sure the federal government is ready, if needed.
Where Are The Problems?
The problems seem to be located at commercial colleges and some universities. Traditional four-year colleges have seen few problems getting federal student loans.
The House has passed the bill authorizing the federal government to buy out the loans through July of 2009. Senator Edward Kennedy has proposed the Senate version to be considered. Award Letters are just beginning to hit the mail. The crunch may come in the fall.
Source: Jonathan D. Glater, New York Times, April 23, 2008
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