Credit crunch closes doors for students

With students around South Africa beginning tertiary study in February the global credit crunch looks set to make accessing a student loan a tough task.
The economic climate has seen banks tighten up on lending and two major banks, FNB and Standard Bank, have confirmed that their approval rates for student loans are down year-on-year.
This is despite an increase in the number of matriculants from the class of 2008 who qualified for entrance to tertiary education.

'Bad debts have increased due to higher expenses and lower incomes'

According to reports, 107 000 candidates achieved matric exemption in 2008 compared to 85 000 in 2007.
Francois Naude, FNB national product manager of student loans, said the bank was "tightening up" as bad debts had increased due to higher expenses and lower disposable income levels over the previous 12 months.

Read full article on IOL.

What To Look For When Searching For A Student Loan Consolidation Company

With so many companies looking to acquire the business of students who are looking to consolidate all of their student loans, it?s easy to be taken in by some of the unscrupulous companies in the market. You don?t want to just take the word of the person who is representing the company because of course; he or she is only going to give you the positive information. You have to know what information is probably correct and what information is just a sales pitch to get your business.

When you look for a company who is willing to consolidate student loans into one payment, you want to find one who is willing to work with you on a payment plan that meets your needs. You want to find someone who can offer you a plan with lower payments at an attractive interest rate. In order to do this, it will be necessary to investigate both the possibility of a private student loan consolidation as well as a government student loan consolidation loan. Of course, your current situation may only quality you for the government student loan consolidation. Things such as unverifiable income or bad credit may prevent you from obtaining private financing, but the federal programs require no income verification or history of good credit.

To be assured that you are dealing with a company that has good credentials, unless the debt consolidation company happens to be a lending institution with whom you are familiar with, always check them out through the Better Business Bureau. The main thing you need to know is if there are any complaints against the company, what they were, and the outcome of the complaints. You want to be sure the company you are considering is not simply a debt management company looking to attempt to con you into a settlement on your loans, and thus, ruining your credit.

When searching for a company with whom to work, you want to be certain that the company is not a ?loan shark? outfit that is going to charge you an exorbitant amount of interest to consolidate your loans. When you research the companies, keep in mind that federal consolidation loan average 1.5% to 4.5%, and you don?t need a job or credit to qualify. Even private student consolidation loans are usually under 9%, so if you are to speak with someone who charges more than that and is not able to give you a term that averages ten to twenty years, you need to look for another company.

The research is an important aspect of finding the right company for consolidating the student loans. You need to be sure that the company you choose is doing everything possible to meet your needs and that the plan you choose is going to help you pay off the student loans and not just get you deeper into debt because of a high payment or interest rate. Make sure you have done all the research and know what you can and cannot do, so that you can write the deal you want based on your research. By knowing beforehand the options that you have, you can make sure that the company you choose will give you the best deal that is possible based on your needs.

Darnell is a writer for several websites. For more information on student loan consolidation visit our debt consolidation blog.

Loan Limitations Worry Int’l Business Students

February 6, 2009 - 1:00am
By Byungkwan Park

International students at The Johnson Graduate School of Management are still scrambling to find student loans in the wake of the announcement last fall that companies like CitiAssist and Sallie Mae would terminate their “no-cosigner” student loan programs as a result of the financial crisis.

While this specific loan crisis is generally not a concern for U.S. students due to the availability of federal loans, international students heavily rely on such loans, which do not require them to find a cosigner within the U.S., to finance their education.

“It’s just the international students [who are affected]. Our domestic students will be fine; they’ll be able to get federal loans,” said Lisa Pastrick, financial aid counselor at The Johnson School.

For the past two years, international students made up nearly a quarter of the Johnson School’s MBA program. Of the 272 enrolled MBA students in the class of 2010, 73 percent are U.S. citizens.

As of now, the Johnson School does not have a definitive solution to the problem. Its website states “the only U.S. loan option available to international students is with a credit-worthy U.S. citizen co-signer or U.S. permanent resident co-signer.” However, the school reassures its students that it is “currently investigating loan options for international students without a U.S. co-signer and will provide information as it evolves.”

Approximately 10 to 15 percent of current international students at The Johnson School have depended on the “no-cosigner” student loans. Tuition at the Johnson School for the 2008-2009 academic year costs $44,950 — an amount which many international students may have difficulty paying without a loan.

“We’re working with several multinational banks and financial institutions to secure a ‘no-cosigner’ loan program,” said Randall Sawyer, direction of admissions and financial aid at the Johnson School.

The Johnson School is specifically bargaining with three banks. According to Sawyer, contracts have nearly been secured for two of these banks and the third one is pending.

“I can say with a very high degree of confidence that we’ll have a ‘no-cosigner’ loan program in the very near future,” he added.

Nevertheless, the number of international students who applied to the two-year MBA program at the Johnson School for the class of 2011 dropped by 20 percent. To encourage accepted international students to enroll, The Johnson School is offering regular scholarships to international students for the first time.

The Johnson School is not the only business school struggling to find a solution to the loan crisis, according to BusinessWeek. Leading business schools that used to offer the CitiAssist loan program, such as the Harvard Business School and the Wharton School at the University of Pennsylvania, are trying to facilitate new programs to help their international students. One school that has found a replacement lender is the Sloan School of Management at the Massachusetts Institute of Technology.

Prabhushankar Rajamani ’10 is one of many two-year international MBA students at the Johnson School affected by the loan crisis. Rajamani, a graduate of PSG College of Technology in India, was attracted to The Johnson School’s immersion program, strong finance program and small, collaborative student community.

Rajamani had been financing his MBA education at Cornell with the CitiAssist loan but now has been placed in a difficult position with the program’s termination.

“I’m using the ‘no-cosigner’ option for the first year, and my second year financing is still unclear. The financial crisis is affecting us in more than one way –– fewer jobs, increased costs and no international student loans,” he stated in an e-mail.

News via Cornell Sun.

Government Student Loans For Starters

There are many factors that you must think about if you want to request government student loans. These loans are overseen by the government, and have a set criteria that needs to be met in order for you to be eligible to request that loan. However, as they are government controlled, several universities are more inclined to work with individuals with this source of financing rather than those who are working exclusively with private loans.

When you apply for government student loans, there are two primary styles that you will work with. The first type is for individuals who wish to register without a parent. The second style needs a co-signer. Within both of these two types, there are several offers for the government student loans. The primary differences in the several offers is where the funding is issued from. Some programs have the funding coming directly from government finances gathered from tax payer funds, while other programs borrow cash from financial institutions in order to finance your loan.

The first requirement for government student loans is credit. Credit is the foundation in which the government evaluates to judge if you are at great risk of returning money to the student loan. If you do not have a credit history, either good or bad, you will commonly need a guardian to be allowed to acquire the loan. If you have bad credit, a co-signer will be required and that individual will be legally accountable for whether or not you pay the funds owed to the government.

Government student loans are predetermined in how much money they will give out to people. The amount is determined by which year of schooling you are in. There are a few situations where you can go beyond the typical maximum loan. However, in these types of government student loans, you will typically pay interest from the time the government gives the school the funding until it is paid off. This is known as an unsubsidized loan, and can be among the most expensive types of funding there are.

The interest rate that you return for government student loans is usually fixed for the life of the loan. However, the rate that you pay will be determined by the current financial standings of the government. Usually, the offer prevents interest rates from growing too costly, as this is against what the federal loans for students program was created for.

FHA Foreclosure Loan - Avoid Foreclosure and Refinance Your Loan

With the growing problem of many people loosing their jobs and not being able to keep up with everything to include house payments. Many people are looking for alternatives to keep their homes and keep their families safe.

There is a way to stop foreclosures, for example, FHA is now offering people the opportunity to avoid foreclosure through potentially refinancing your loan. But, you have to be careful, depending on the way your home loan is set up, this could be difficult. The best thing to do, is to call your mortgage company to find out. The companies don't want you to loose your homes, far from it. In many cases the companies actually would rather help the lenders.

Check and see if your lender is working with FHA. See if they are working with FHA to help their lenders with the problems they are facing, many may not, but it is possible to see if FHA can put you in touch with a bank that may be able to help you. Some companies may have a special program like this in place. Do not avoid your company, the best bet is to see if they will work with you in this rough economic time that all of us are facing.

There are many websites that are offering specific information about your options. Your best bet is to make sure you jump right away to take care of all of your basic needs. Thus making sure you have everything covered.

Hector Milla runs the Stop Foreclosure Loans Help website, where you can get immediate assistance from professionals serving your state. An intelligent no-cost application will match you with seasoned and trusted specialists in less than 5 minutes.

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