Private Student Loans And New Student Loan Bill

Q: I will be getting ready to attend college shortly. I have serious doubts about being able to cover all my college tuition costs with what I receive in federal financial aid and federal student loans. With this new student loan bill it seems like they are cutting private student loan lenders out, so my question is where does someone like me turn next after FAFSA if there are no longer private student loans?

A: It seems as though you may have misunderstood the new student loan bill / legislation. The new student loan bill effects The Federal Family Education Loan Program, not private student loans for college. Under the the old “rules” of the The Federal Family Education Loan Program, banks and private lenders were allowed to make loans that the federal government would guarantee or insure. With the new student loan bill, banks and private lenders will no longer have the ability to do this. The new student loan bill will still permit private lending institutions to make private loans, but the federal government simply will no longer subsidize them.

You are correct to file a FAFSA first to see what you can obtain from federal financial aid for college. After you have received all you can obtain from scholarships, grants, and federal student loans, you still have the option to obtain a private student loan if you wish. For a listing of private student loans you can view our Private Student Loan Lenders Directory and for more on financial aid for college you can view our new eGuide 89 Financial Aid For College Tips by StudentLoansForCollege.org.