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Crisis on Wall Street and student loans?

srk2009srk2009 Registered User Posts: 98 Junior Member
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?
Post edited by srk2009 on

Replies to: Crisis on Wall Street and student loans?

  • JeevsJeevs Registered User Posts: 20 New Member
    I'm in the same dilemma

    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

    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

    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.

    I believe they should put a $25,000 cap on tuition
  • NikkiiLNikkiiL Registered User Posts: 1,048 Senior Member
    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.
  • nocousinnocousin - Posts: 841 Member
    The crisis is indeed grave and BOTH parties in Congress are playing political football.

    Its a very real concern. Home equity loans are GONE! Home values are plummeting....70% in California.

    Bank failures are becoming a serious concern, though deposits are safe if under 100k, protected by FDIC.

    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.

    There is blame a plenty to go around to many people and both parties.

    BUT CONGRESS BETTER ACT AND BETTER ACT SOON, or we are going to be in REAL trouble as nation.


    They will deal with the regulation of wallstreet later. But now we need the money put into the system to keep banks lending.
  • srk2009srk2009 Registered User Posts: 98 Junior Member
    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.

    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.

    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).
  • nurseratchetnurseratchet Registered User Posts: 185 Junior Member
    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.
  • JeevsJeevs Registered User Posts: 20 New Member
    So does this mean the amount of students going to private universities will drop off, possible dramatically?

    And enrollment in state universities and community colleges will increase?

    Well, bye bye northeastern
  • nurseratchetnurseratchet Registered User Posts: 185 Junior Member
    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.
  • srk2009srk2009 Registered User Posts: 98 Junior Member
    Honestly, I think you should still apply for Northeastern if you want to go there. You never know. You could get an amazing scholarship.
  • NikkiiLNikkiiL Registered User Posts: 1,048 Senior Member

    Stafford Loans do not take your credit history into consideration. Private educational loans do.
  • srk2009srk2009 Registered User Posts: 98 Junior Member
    Well that's a relief. :) Thanks for the quick answer!
  • brownsgolfbrownsgolf Registered User Posts: 3 New Member
    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.
  • kelsmomkelsmom Registered User Posts: 15,142 Senior Member
    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).

    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.
  • toledotoledo Registered User Posts: 4,945 Senior Member
    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.
  • hikidshikids Registered User Posts: 1,284 Senior Member
    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.
  • standrewsstandrews Registered User Posts: 1,365 Senior Member
    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.

    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.
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