” It is no secret that the country has gone into a recession, with the unemployment rate increasing and people losing their homes, students are finding they are not exempt from the crisis the country is facing. With the cost of living, food, fluctuating gas prices, many students are being caught in a very tight spot in order to pay for college.””
It is no secret that the country has gone into a recession, with the unemployment rate increasing and people losing their homes, students are finding they are not exempt from the crisis the country is facing.
With the cost of living, food, fluctuating gas prices, many students are being caught in a very tight spot in order to pay for college. With many taking out private education loans to pay for the difference many are likely to see an increase in the interest rates.
With banks getting out of the student loan business, many have been left wondering where to turn. Here are a few places students can still apply for loans at and what interest rates they can expect.
Chase bank offers several different loans to students but focuses on the Stafford loans. Last year subsidized Stafford loan rate from Chase Bank was 3.61 percent during school, grace period and deferment periods. While enrolled at school the government would end up paying the interest of the loan, until the person graduated.
After graduation the rates would rise to 4.21 percent.
Now Chase interest rates for a subsidized Stafford loan is at a fixed rate of 6 percent for both while a student is in school and while they are paying the load back.
Another company to get a Stafford loan is through SallieMae.
SallieMae offers a Stafford loan with an interest rate that goes down over the first four years. If a student was to get a loan that was disbursed to the student on July 1st 2008, the interest rate would be six percent until June 30 2009. From July 2009 to June 2010 the rate would then drop to 5.6 percent, after that the next years interest would drop to 4.5 percent and it would continue to drop until the student had graduated.
One of the main drawbacks to this loan is on July 1 2012 the interest would go up to 6.8 percent, and if a student graduated in four years they would be getting out of school and have to start paying back the loan when the interest rate is the highest, before then, 2008-June 2012, the government is paying the interest on the loan.
Douglas McNutt director of Student Financial Aid this to say about the entire economic influence on student loans The economy has had little effect on Stafford loans disbursed through the university, that aid is guaranteed on a need basis by the federal government. The downward spiraling economy will not have too much effect on those loans. The effect will be on outside lenders such as banks like Chase and National City who give private loans. These loans can be good because the student is able to defer payments till after they graduate, but the negative side is the interest is still growing. McNutt said one of the best thing a student who is looking for a loan can do is shop around and make sure they fully understand what they are getting into when they take out a loan.
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