<p>"CHICAGO - Finding financial aid for college this year promises to be tougher than any final exam.</p>
<p>The quest for money that begins for students and parents every January has taken on new urgency in 2009 amid fears that loans and grants will be scarcer than in the past due to the recession.</p>
<p>“The financing system for college is in real crisis,” said Barmak Nassirian, associate executive director of the American Association of College Registrars and Admissions Officers. “Every one of the participants in the system is experiencing hardship higher education institutions, states, aid donors and families all are cash-strapped.”</p>
<p>Federal student loans remain readily available with some funding even increased recently by Congress. But the prospect that grants and scholarships may be cut at many schools, combined with the shrinking availability of private loans, has fueled widespread angst at a time when more people than ever are seeking help. Applications for federal aid for the current academic year already are running 10 percent above last year’s record pace, according to the Department of Education…</p>
<p>Indeed, the news isn’t all bad. The federal government has authorized some $95 billion in grants, loans and work-study assistance to help almost 11 million students and their families pay for college this year, and its recent commitments mean that total will all but certainly be exceeded next year."
[Finding</a> college aid could prove tough test - Personal finance- msnbc.com](<a href=“http://www.msnbc.msn.com/id/28830583/]Finding”>http://www.msnbc.msn.com/id/28830583/)</p>
<p>The problem with this kind of so-called “journalism” is that it is completely fact-free.</p>
<p>“fears”…“concern”…“likely to decline”…“scary”, yada yada, but, with the exception of the decline of a fewer private lenders (which actually is a good thing) zero real info on any actual finaid/loan reductions</p>
<p>Instead of the whining…</p>
<p>“No school is known to have withdrawn pledged financial aid this academic year despite financial setbacks…”</p>
<p>“Some students will benefit from the turmoil…”</p>
<p>Siglio21, there is no “haha” about how long a $100K loan will take to pay. THat very subject was under discussion where a couple who had over $100K in loan are still in debt to their eyebrows despite each of them having 6 figure incomes. Though that is an extreme case, and I have some doubts about the situation, it is no joke that there are many out there struggling to pay their student loans.</p>
<p>My friend’s daughter has a terrific job after law school, paying very well. However, her first job out of law school was a valuable but low paying clerkship. She could not afford an apartment if she wanted to get those loan levels down. She rented a room and lived very much on a dime that year. She would have loved to have done a second year which would have been great for her in terms of contacts and experience, but she could not afford to do so because of those school loans. She is ever so tired living like a student now for 8 years, never having enough money. Even with her 6 figure income, however, with those school loans looming over her, she is not going to be living high. She is going to be 28 years old and if she marries someone in a similar loan predicament, they are going to have enough debt to have bought a nice house! If they want to start a family in the next few years…well, it’s going to be tight all along, and we are talking about someone waaay up there in income. There are kids with debts way up there who are making a third of that. They start out in debt, and never really get out of it. I 've known such folk. No credit, low standard of living, tough life, always scrounging. It’s very difficult to stick to a budget and live within means. Even more difficult when the huge cloud of debt is over your head from day one in the work force.</p>
<p>I’m all doom and gloom in the above post. I advise all who are taking out loans to make sure you understand how much you will have to pay each month for how long. Sounds like it’s simple, but many do not know until they have to make those payments. It may not make sense to borrow that kind of money. </p>
<p>What I found so incredible about that lawyer couple featured in Forbes magazine was that they did not do the math to see how much they would have to pay for how long. After years of paying their loans, they seem to owe nearly as much as they borrowed. Something is not right there. Anyone who is taking out loans should know the implication of borrowing down to the penny.</p>
<p>Private loans ARE more difficult to get these days. My school has far more parents declined for PLUS loans than accepted. Many students are unable to obtain an alternative loan without a cosigner - and if the parents have bad credit, that rules them out as cosigners. Stafford loans are capped by both year in school and lifetime limits (which are high, but I have seen students at their lifetime limit). The reality is that borrowing is not as easy as it once was (not necessarily a bad thing in this case …).</p>
<p>Knowing this, students need to shop for a college with the knowledge that they might not be able to borrow a whole bunch of money even if they are willing to do so.</p>
<p>While perhaps extremely difficult for the individuals involved, in the big picture higher credit requirements is a GOOD thing. The reason we are in this financial meltdown is due to easy credit.</p>
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<p>And that is even better for them in the long run. IMO, student debt should not exceed the Stafford limits.</p>
<p>We have received letters from several schools urging D#3 to apply for admission & to apply for FA & to not pay attention to the media’s spread of all this doom & gloom. It seems the colleges are having to combat these types of news stories. I would guess that perhaps these particular schools are not happy with the number of their regular decision applicants.</p>