According to this recent article on MSNBC, college students are scrambling for financial aid for next year:
“The financing system for college is in real crisis,” said Barmak Nassirian, associate executive director of the American Association of College Registrars and Admissions Officers. “Every one of the participants in the system is experiencing hardship – higher education institutions, states, aid donors and families all are cash-strapped.”
According to the article, college grants are down as schools struggle with their depleted endowments. Private loans are also way down. Last year, there were 60 private lenders loaning $19 billion. Today there are just 21 private lenders, and they are making it increasingly difficult to qualify for a private student loan.
On top of that, those families that did consciously save for college with a 529 Plan or Coverdell Educational Savings Account (ESA) are facing enormous devaluations due to the market losses.
On the other hand, the article did point to some good news: The federal government is shoring up the availability of Stafford student loans – which have lower interest rates and better terms than private loans anyway. And if President Obama’s stimulus plan makes it through Congress, the allowable limit for federal student loans will increase significantly, effective immediately.
So, tell us: How is your family coping with the ups and downs of student financial aid? Have you had to alter or delay your college plans as a result of the recession?