Student loans are beginning to be more and more of a business for companies. The low interest rates (although they aren’t as low as they were 3 years ago) and the accessibility of the loans have made them a lucrative option for students. Many students see these loans as a better option than credit cards, as they should.
As costs go up to attend college and to live away from home, companies are capitalizing by partnering with universities and colleges to fund these loans.
According to FinAid, few students can afford to pay for college without some form of education financing. Two-thirds (65.6%) of undergraduate students graduate with some debt, and the average federal student loan debt among graduating seniors is $19,202 (Stafford and Perkins Loans).
The Chronicle of Higher Education states, concerned about the deals that some lenders have struck with financial-aid administrators to win student-loan business, U.S. Education Department officials may bar colleges from recommending fewer than three lenders to students who must borrow to pay for college.
Department officials also may rewrite regulations that forbid student-loan providers from offering certain inducements to colleges to secure applicants for federal loans. The current rules are vague, and the agency would like to be clearer about what types of activities are banned.
The blog Simple Kind of Life has an interesting post about student loan consolidation becoming big business now-a-days. It couldn’t be any more on point. She describes her experience as she got her AA degree.
If you are a student, do your best to limit the amount of loans you take out. If you don’t need that money, it’s probably better to take it out when you really do need it. It’ll save you from interest accruement and a lot of heart ache after graduation.