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Paying for College this Year

Posted by: Lisa Nichols | Jun 10,2008

For years, families have scrimped and scraped to help pay for their kids’ college educations. This year, the student loan qualifications have tightened up more than ever and it’s going to be even more difficult for kids to qualify for student loans. Families can still pay for college this year, but their options for education loans have reduced considerably.

 

Education Loans Not Readily Available to Help Kids Pay for College this Year

 

This year, for the first time in a long time, education loans may not be a viable way for your kids to pay for college. More than 125 financial institutions, lenders and private lenders who provided loans for higher education have stopped offering financing to students and their families. Suddenly, it’s become extremely difficult to qualify for student loans. The education loans that are available to help families pay for college also have higher interest rates than in the past. In addition to struggling to qualify for student loans, high interest rates mean that kids will be paying for college well after they receive their degree.

 

Department of Education Helping Families to Pay for Education Loans

 

The Department of Education (DOE) released information at the end of May that should help families pay for education loans. The DOE press release outlines a four-part plan that pledges to purchase new federal loans for the upcoming school year and will provide short-term liquidity to lenders lacking access to capital. These plans, along with Congressional changes that will make it easier to qualify for student loans and that increased the amounts of education loans available to borrow should help families who have been scratching their heads trying to figure out how they would pay for college.  

 

If you will be applying for education loans this year, shore up your credit history first. Applying for a low interest credit card or a balance transfer credit card is quick way to reduce high interest debt. Once you move your debt to a zero percent interest rate or to a low life of balance interest rate, pay more than the minimum due each month to get your debt paid down more quickly.

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