Student Loans and the Credit Crunch – How to Borrow in 2009
My mother called me up today – not to check in on the much-anticipated arrival of her second grandchild, but to solicit advice for a friend. It turns out the past year has been a rollercoaster ride for this friend. First, her daughter was accepted to the vet school of her dreams. The only dark cloud was the hefty price tag – a problem she solved by securing a loan with a private lender, at a rate she could afford. This fall, the lender pulled out of the market (like so many others). Would her daughter have to give up on her dream?
Very fortunately, the answer is no. While it is true that private lenders have been running from the student loan market like foxes from hounds, Uncle Sam has stepped in with a rescue that so far seems to work. The void that the private lenders left behind will be filled by the Department of Education. He has also upped the loan limit for students by $2,000 per year, as well as promised to buy packaged student loan debt if no one else will.
My mother’s friend and her daughter were relived to hear that she could still become a vet. Just stick with government-funded loans, and your college-aged children should be able to make their dreams, too, come true.
Stacy Francis, Savvy Ladies