Student borrowers latest to feel credit crunch

[El Pinko]

http://www.signonsandiego.com/uniontrib/20080217/news_1b17marks.html


Student borrowers latest to feel credit crunch
GAIL MARKSJARVIS
February 17, 2008

If you want to borrow a lot of money for college, you are not going to like what the mortgage mess is doing to you.

The credit crunch, which started with a panic over people missing home loan payments several months ago, has spread like a disease, infecting a broad range of loans. Now it may poison opportunities for college students to obtain some loans and is adding painfully high interest costs to many.

So far federal student loans, or the low-interest college loans offered under government rules, are still plentiful. Students who get Stafford loans pay 6.8 percent interest, which is relatively low compared with other loans available for college.

But concerns developed last week because some lenders have decided to stop giving out student loans. The lenders made the decision because they had trouble borrowing money themselves. And they need to borrow money in order to lend money to students.