Spring Break
Federal student loan update
Sabrina Osborn
Issue date: 10/20/08 Section: News
The economic state of the United States typically has a direct effect on a college's enrollment numbers.
Approximately 10,000 students are paying for their tuition and fees with financial aid this semester, according to Jan Brandow, UMKC director of Financial Aid and Scholarships.
She said this number includes all types of financial aid available including loans, grants and work study.
The U.S. Department of Education increased unsubsidized federal Stafford loan limits for the 2008-2009 school years from $4,000 to $6,000. The average American student already leaves their undergraduate years with loans in the five-figure range.
"It is more difficult [to make a judgment about increasing student debt] this time of year," Brandow said. "The federal government raised the annual loan limit for undergraduate students by an additional $2,000 of unsubsidized Stafford loan. Many students have taken this additional loan amount."
A student using federal loans to pay for their schooling should be aware of the changes going on in the student loan industry including the changes in the benefits (such as interest rate reductions) offered by lenders.
Students should also be conscious of the ramifications student loans can have on their credit after graduation.
"Borrower benefits have changed dramatically within the last six months," Brandow said. "Most lenders have stopped offering any major borrower benefits. And many lenders have completely dropped out of the student lending program.
This change is due to several conditions: Congress made reductions in the margin of profit lenders could make on student loans; the credit crisis hit and lenders were not able to borrow the money … they needed to continue making loans; many lenders dropped out of the program so the remaining lenders [needed to] absorb increased loan volume. This big one, two, three punch has made the student loans unpredictable."
The UMKC financial aid department is still searching for benefits and keeping the students' best interests in mind when choosing the lenders they suggest to borrowers.
"We send out a Request for Information (RFI) to multiple lenders and ask them to answer questions about their company, their services and about each loan product they offer to students," she said. "We take each RFI that is returned and evaluate and compare the answers based on what is best for students."
Students interested in learning more about financial aid can visit www.mappingyourfuture.org, the Web site UMKC uses to educate borrowers.
This site offers information for undergraduate and graduate students including tips on how to manage student loan debt.
sosborn@unews.com
Approximately 10,000 students are paying for their tuition and fees with financial aid this semester, according to Jan Brandow, UMKC director of Financial Aid and Scholarships.
She said this number includes all types of financial aid available including loans, grants and work study.
The U.S. Department of Education increased unsubsidized federal Stafford loan limits for the 2008-2009 school years from $4,000 to $6,000. The average American student already leaves their undergraduate years with loans in the five-figure range.
"It is more difficult [to make a judgment about increasing student debt] this time of year," Brandow said. "The federal government raised the annual loan limit for undergraduate students by an additional $2,000 of unsubsidized Stafford loan. Many students have taken this additional loan amount."
A student using federal loans to pay for their schooling should be aware of the changes going on in the student loan industry including the changes in the benefits (such as interest rate reductions) offered by lenders.
Students should also be conscious of the ramifications student loans can have on their credit after graduation.
"Borrower benefits have changed dramatically within the last six months," Brandow said. "Most lenders have stopped offering any major borrower benefits. And many lenders have completely dropped out of the student lending program.
This change is due to several conditions: Congress made reductions in the margin of profit lenders could make on student loans; the credit crisis hit and lenders were not able to borrow the money … they needed to continue making loans; many lenders dropped out of the program so the remaining lenders [needed to] absorb increased loan volume. This big one, two, three punch has made the student loans unpredictable."
The UMKC financial aid department is still searching for benefits and keeping the students' best interests in mind when choosing the lenders they suggest to borrowers.
"We send out a Request for Information (RFI) to multiple lenders and ask them to answer questions about their company, their services and about each loan product they offer to students," she said. "We take each RFI that is returned and evaluate and compare the answers based on what is best for students."
Students interested in learning more about financial aid can visit www.mappingyourfuture.org, the Web site UMKC uses to educate borrowers.
This site offers information for undergraduate and graduate students including tips on how to manage student loan debt.
sosborn@unews.com
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collegeloanconsultant
posted 10/20/08 @ 4:26 PM CST
Students should also be aware of state programs when making decisions about college loans. These can help with repayment or forgiveness in certain cases. (Continued…)
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