If you’re just getting around to looking for a lender for your financial aid, you’re not alone. You might be finding out that this year wasn’t the year to wait for awhile before getting serious about your student loans. The good news is that while some students have been forced to look for new lenders, there aren’t many wholesale reports of students not being able to find any lenders to help them in their semester(s) of need.
Things didn’t look so good at the end of last semester. Loan providers – in fact some of the largest loan providers – dropped out of the student lending business, forcing thousands of students to locate new lenders. Closer to the beginning of the Fall semester, lenders who thought that their financing was solid found themselves with little cash to lend and pulled out of loan commitments they’d already made for the current semester. In other cases, state-run student loan agencies were forced to scramble for new funding sources to be able to continue underwriting student loans.
Is this instability likely to continue? Should students who still need to locate lenders be worried? The short answers are no and maybe. Congress has already taken steps to stabilize the student lending industry by authorizing the Department of Education to purchase student loans initiated by third parties. Unfortunately, that authorization doesn’t begin until next October. Until that time, student borrowers are being advised to keep tabs on their lenders and be prepared to act if things don’t go smoothly.
If you’re behind the eight-ball on getting your loans in place, or you really don’t need loan money until the second semester, it doesn’t hurt to start your research right now. You can even get your loan set up without pulling the trigger on it until you need the cash.
If you’re really behind the eight-ball and haven’t yet applied for financial aid, now is the time to get yourself rolling. As quickly as possible, you should fill out the Free Application For Student Financial Aid, even though you’ve missed all the deadlines for Fall. Get your application together and submitted. Your financial aid office isn’t likely to work with you until you do.
You can get a Student Aid Report (SAR) returned relatively quickly. If your aid report includes loans, start moving on those right away. The money may not show up until the Winter semester, but the sooner you start, the sooner you’ll be able to get assistance.
As always, max out your Federal Financial Aid first, and then, if needed, use private student loans to close the gap until you get a better financial aid plan in place. While all of this is going on, you should also be looking for scholarships and grants from private sources. The less money you need to borrow, the better off you’ll be.
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