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Mar 25, 2008 7:26 pm US/Pacific
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Student Loans May Be More Difficult To Obtain
Reporting
Sue Kwon
(CBS 5)
For many high school seniors in the Bay Area, college acceptance letters are coming any day now. But, it may be tougher for students to get a good loan.
Ora Lazare plans to attend UC Berkeley next year with the help of a low interest federal student loan.
But Lazare heard discouraging news Tuesday. All those credit cards bills and mortgages that are not getting paid are taking a toll on lenders.
Now lenders are pulling their money out of student loans.
There are approximately 2,000 lenders participating in the federal loan program. So far a small number - 20 - have pulled out. But still, that leaves thousands of students scrambling to fill out paperwork to find a new lender in the program.
And the concern is the trend will continue.
"There will be a lot of students that won't be able to go to college because they need financial assistance and can not get it through federal programs," Lazare said.
Lazare added if she can't get enough in federal loans to cover college expenses, she'll look for a private loan despite high interest rates.
Taking out private loans is what Roxanne Martin did to cover costs of attending the California Culinary Academy in San Francisco.
"I saved up about $15,000 and got some loans. But I'm taking the rest out in private loans," Martin said. "It's about 20 percent interest. It's like credit card rates."
Martin plans to consolidate her debt into a more affordable payment structure when she graduates so her $50,000 debt doesn't double over the years while she's working to pay it back.
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