Budget Beatdown – The Student Loan Saga Continues
In the wake of the sub-prime lending market crash, troubled credit markets have been brought to student doors. Sub-prime loans are given to borrowers who do not quality for the market’s best interest rates because of bad credit history; many of these borrowers are college students. Some private lenders are now saying that private loans will be more expensive and harder for students to secure. Sallie Mae, the leading provider of student loans, has announced that it will no longer provide student loans to students with sub-prime credit scores, blaming the cutbacks on the failing housing market and recent passage of the College Cost Reduction and Access Act that reduced federal subsidies to private lenders while increasing funding for grants and lowering interest rates on federal student loans.