<p>Let's be real here. As a fledgling economist (yeah, economics is a hobby of mine - don't let that get out ;)) I am extremely concerned about the crisis on Wall Street right now, especially since I'll probably be applying for a student loan (last time around, my best financial aid package met 50% of my need, not including estimated expenses, and now my family earns even MORE money because I've worked full-time for the past ~2 years). For those who are more familiar with the student loan banks and companies, do you foresee the credit freeze that we're experiencing right now affecting the ease with which students can attain student loans?</p>
<p>I'm in the same dilemma</p>
<p>I might have to end up going to a state school instead of private if I can't get a loan, which seems more and more likely</p>
<p>But the biggest problem is the private schools are charging way too much, $50,000 a year for tuition + other things! That's like a good house</p>
<p>The govt. needs to regulate how much a college can ask for tuition and the other necessities without disrupting financial aid too much. The universities are getting greedy and charging way too much, it's absolutley outrageous.</p>
<p>I believe they should put a $25,000 cap on tuition</p>
<p>More than likely it will not affect Stafford Loans completely. It may reduce the number of lenders available, but with over 3000 Title IV approved lenders available, there should still be plenty available to choose from.</p>
<p>The crisis is indeed grave and BOTH parties in Congress are playing political football. </p>
<p>Its a very real concern. Home equity loans are GONE! Home values are plummeting....70% in California.</p>
<p>Bank failures are becoming a serious concern, though deposits are safe if under 100k, protected by FDIC.</p>
<p>We are witnessing history. A total deflation of a giant helium balloon. I could digress into the REAL CAUSES of this mess......but that would not serve any purpose here.</p>
<p>There is blame a plenty to go around to many people and both parties. </p>
<p>BUT CONGRESS BETTER ACT AND BETTER ACT SOON, or we are going to be in REAL trouble as nation.</p>
<p>CALL YOUR CONGRESSMAN and SAY: "GET OFF YOUR BACKSIDE AND VOTE YES FOR THIS ECONOMIC RECOVERY BILL." </p>
<p>They will deal with the regulation of wallstreet later. But now we need the money put into the system to keep banks lending.</p>
<p>My Representative did vote yes; in fact he was heading up the effort. I <3 Barney Frank. :D I suppose I could call a different Rep and say I'm from their District... haha. Not exactly ethical though.</p>
<p>Jeevs - I don't know the first thing about the expenses that colleges have to pay for so I can't speak intelligently to that point. I'd sure be excited about paying $25,000 or less per year though.</p>
<p>NikiiL - Thanks for that reassurance!!! I'm just wondering, I don't know too much about Stafford loans... is good/decent credit a pre-requisite? I have a poor score because I have a very short credit history and have been late a couple of times (toooootally my fault I know - I'm working to fix it).</p>
<p>The most disturbing part of reading these posts and the news in general is most people don't understand the borrowing is the problem. I believe college age students will be hit the hardest throughout this crisis. Carefully consider the amount of debt you are taking on. The banks are tightening for a reason. We have over borrowed and over spent as a nation. Consider what it will be like 4 years from now when you need to get a job, find a car loan, want to buy a home in few years etc. You may not have control over those things but you do have control over how much debt you are taking on now. Even if this bail out passes, it is just a bandaid.</p>
<p>So does this mean the amount of students going to private universities will drop off, possible dramatically?</p>
<p>And enrollment in state universities and community colleges will increase?</p>
<p>Well, bye bye northeastern</p>
<p>Competition for in state schools will likely increase. Private colleges may see a decline in admissions but I don't believe a decline in tuition will follow anytime soon. Students will probably take into consideration the location of a college more with fuel and travel costs so high. Home equity loans will be drying up. Parents will also need to worry about their own retirement, 401k's, job security etc. Prepare for the worst is the best advice anyone can give.</p>
<p>Honestly, I think you should still apply for Northeastern if you want to go there. You never know. You could get an amazing scholarship.</p>
<p>srk209,</p>
<p>Stafford Loans do not take your credit history into consideration. Private educational loans do.</p>
<p>Well that's a relief. :) Thanks for the quick answer!</p>
<p>Personally, I feel that the economic problems need to settle on their own. My congressman voted that way and I have sent an e-mail asking him to continue opposing it.</p>
<p>The school where I work went to direct loans this year due to the uncertainty in the loan market. These loans are made directly through the government. It just takes any guesswork out of applying for Staffords (since some lenders did pull out of Stafford lending at the last minute). No credit check for Staffords. Parent PLUS loans have a credit check, and dependent students can borrow another $4000/year if their parents are turned down, which may be helpful for some students (for many at my school, actually).</p>
<p>I agree that our economic situation has been brought about by excessive borrowing. If more students end up at lower cost schools, it won't be the end of the world.</p>
<p>I am really curious about what's going to happen to student loans. My husband's large business can't get a loan right now and the business has been extremely profitable for several years. In fact, he was just bragging about record profits in June and July and the size of his bonus. Now their bank won't lend them anything, nor will their parent company. His idea for handling the cash-flow problem is to offer customers discounts for paying early, hoping that they can bring in enough money for this short-term dilema.</p>
<p>I think we will know a lot better by the end of the week when congress has weighed in. The senate goes today and one hopes that congress realizes how increasingly bad it looks. None of these guys may save their jobs if credit markets go because of continued inaction. There is plenty of time for a disaster to occur before the election. I think that would do it for all of them, so it is likely we will have a fix of some sort that will help take care of the credit markets.</p>
<p>A little over year ago there was not much concern about the availability of loans, but how things have changed in the last 8-14 months. The loan landscape might be a whole lot better in another 6 months. We simply don't know. So it's difficult to make any kind of firm plans. The only thing to do is to cover yourself with a number of economic alternatives.</p>
<p>For HS seniors that means making sure you college list includes more than one economic safety school. These schools need not be lesser institutions. It will be 7 months, May 1, 2009, before you need to commit to a school. Hopefully the picture will look much better by then. But then again, things can change again during the 4 years you are in college. This year's seniors are have a more realistic view of paying for college than those graduating in the past couple of years. It's one thing to go into college being aware of the financial pitfalls that can occur; It's quite another to have financial rug pulled out from under you when you are half way through your college education.</p>
<p>The thing is, the student loan industry became shakey way before this current financial crisis. It came under its own crisis when Attorney General Cuomo began his investigations after receiving a tip from MyRichUncle. The rules for lenders became much stricter and now they are having a difficult time finding funding. But, this problem was around WAY before the current financial crisis.</p>
<p>Timely article to this thread published in today's Inside Higher Ed: Trickle-Down</a> Economic Duress
[quote]
But as talk of pending national economic doom has reverberated for much of this year, though, predictions of blunt force impact on higher education in terms of evaporating student loans, families unable to pay for college have largely failed to materialize. [emphasis added]
[/quote]
</p>
<p>
[quote]
Despite many dire predictions through the winter and spring that the seizing of the credit markets and the apparent beginnings of an economic downturn would result in a major shortfall in student loan availability and potentially leave colleges with many students and families unable to pay their tuition bills (because of a loan shortage, an inability to borrow against home equity lines, and/or lost jobs), colleges have seen relatively little of that.
[/quote]
</p>
<p>
[quote]
The longer-term outlook is highly uncertain, and higher education finance experts offer differing assessments about how bleak or blurry it is (few if any see it as bright). One caveat they all offer was summed up by Russell K. Osgood, president of Grinnell College: The situation is unsettled and remains turbulent. Anything I say today could be nullified tomorrow. [emphasis added]
[/quote]
</p>
<p>
[quote]
The results of a significant downturn, Osgood said in an interview Wednesday, could lead colleges to put a break on tuition and other fee increases, produce a significant pullback in future capital expenditures, and the first significant period of cost containment in higher education. I think people will say, Do we really need all this? [emphasis added]
[/quote]
</p>
<p>Considerably more was involved than just the tip from the people at my rich uncle. Although that did play some role in the call for investigations. </p>
<p>Jon Oberg a senior official at the USDOE had come forward with information about massive overbillings of the government by the several of the larger companies involved in the SL industry. Additionally he noted that policies affecting SL regulations were being written by lobbyists and moles for the SL companies. </p>
<p>The massive overbilling (500 million) was never fully resolved or paid back. </p>
<p>Additionally Paul Baskin of the "Chronicle of Higher Education" had written several influential exposes of abuses within the student loan industry and the USDOE. He continues to publish these articles. </p>
<p>And although there have been repeated articles and exposes within the specialist press such as the Chronicle and Higher Education watch, our leadership has generally avoided addressing the problems with the current structures of student loans and student funding. Too much influence money has been spent by the corporate players it seems. Although the improprieties within the SL industry are as rife as they are with the subprimes...and for much the same root cause of inadequete regulatory supervision or outright collusion by governmental officials. </p>
<p>And more will be spent, as there is inside discussion of a bailout for the major SL players, coming close to a proposed 600 billion (from the Chronicle).</p>