Magazine article University Business

Alternative Loan Availability Action

Magazine article University Business

Alternative Loan Availability Action

Article excerpt

IN RECENT YEARS, ALTERNATIVE LOANS HAVE BECOME INCREASINGLY important in college financing. According to 2007 data from The College Board, these loans grew at an annualized rate of about 24 percent (in inflation-adjusted dollars) for undergraduate and graduate students over the prior five years. However, 65 percent of 263 financial aid administrators surveyed by Student Lending Analytics are concerned about the credit crunch impacting the alternative student loan supply. SLA, a California-based company that helps financial aid officers with lender selection, conducted the survey on June 10 and 11.

What are financial aid offices to do? Significant numbers of aid administrators are encouraging the use of Parent PLUS loans and loan application co-signers, as well as building alternative lender lists. But SLA founder Tim Ranzetta cautions against a one-strategy-fits-all approach in communicating with families about alternative loan availability. "It is critical to customize the approach based on understanding the financial situation of the student and his or her family," he says. For example, parents who strongly believe their child has a significant stake in his or her education might be steered toward the idea of co-signing on a student loan. …

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