Will I be able to get a Federal Loan?
While an increasing number of lending institutions are quitting the Federal student loan game, families that are not able to pay out-of-pocket for higher education are beginning to worry that there will not be enough Federally backed funding for their student.
Recent legislation from Congress has put a limit on the amount of government subsidies it will offer to lending institutions for providing federal student loans. This has forced some smaller lenders to stop offering student loans , and others to at least reduce the benefits associated with such loans. The subsidy limit seems to be a response to unethical predatory lending practices by lenders, as well as some financial aid advisory departments at universities across the nation.
The fear of not securing a federal student loan will hopefully not discourage anyone from going forward with applications and preparation for a higher education. The Secretary of Education, Margaret Spelling, has done some recent investigation into the matter. She assures the public that there were no circumstances found where a student qualifying for financial aid was not able to find some form of a federal loan.
Realistic views of the lending industry recognize that despite the reduction of companies offering student loans, there will still be around 2,000 other lenders that will be receiving enough subsidies to deal in federal loans. There are even some universities taking action to help students by awarding grants in lieu of loans, then providing a work program to earn that grant amount.
Federally backed loans will still be available for those who need them. There are plenty of honest, highly profitable lenders that will be able to handle the inherent limitations on federal student loans. These are the lenders that are more likely to be easy to deal with in the first place.
The key to insuring you will be able to get the best possible terms on your federal loans, as well as the most possible grant money for your education is to file your paperwork as soon as possible. The grant amounts that are offered are limited to a certain amount each year. IF you are one of the first groups of applicants, it stands to reason you will likely get all that you qualify for from the PELL grant system. If you take your time to apply, you may end up scraping the bottom of the barrel, so to speak.
Get an appointment with the financial aid advisor for your desired university. They will give you the information you need to be sure you meet all the important dates for the most beneficial financial aid package you can possibly get.