petra asked:


If this financial crises continues (which I’m quite sure it will), what are the chances that the student loans many of us have been promised for the spring semester wont be dispersed? I’ve heard that new government loans for education may be cut off if things continue as they are, so applications for next year might be shaky. But, what about those of us who have been promised funds for next semester- has that money already been set aside and guaranteed?

ALBERT

One Response to “What are the chances that the gov wont make good on dispersing student loans next semester?”

1. MICAH on January 26th, 2010 4:14 pm

   JIM

   The government doesn’t provide the money to make Stafford loans, the government’s only role is to guarantee repayment. With few exceptions, Stafford loans are made by individual lenders who elect to participate in the government’s Stafford lending program.

   The reality is that government guaranteed loans are the loans MOST favored by lenders - if the lenders continue to cut back on their lending activity, it won’t be government guaranteed loans that they’ll be cutting back on.

   The lenders are worried about the qualify of loans that they make - but in the case of government-guaranteed loans, the government assumes all the risk of non-payment.

   If there is one thing you don’t have to worry about in life, it’s whether the lenders will be making Stafford loans next semester.

   Now, if you want something you can worry about - the Department of Education has informed Congress that they anticipate coming up about $6 billion short on Pell Grant funding next year, because so many more students are qualifying for need-based assistance. Unless Congress increases funding for student aid, the DOE may need to tighten up the rules on Pell qualification, or cut the amount of money awarded under the program.

   It’s not my place to encourage you to vote for a particular candidate in the upcoming election, but I will tell you that there is a significant difference between the 2 candidates in terms of their educational proposals. It would be worth your time to read up on those plans, and consider educational financing when you make your decision. Whatever you do - please get out and vote. It’s important that the priorities of our young people get an appropriate hearing in the halls of government. When young people don’t vote, they have no voice in Washington.

   I hope that helped - don’t worry about your second semester government loan financing.

   Now private loans…hmm……

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