| US college students appear to be the latest victims as | | | | government program in which it backs loans to |
| the economy slows and money for borrowing dries up. | | | | means-tested students. The federal government loans |
| American students who need a student loan to pay | | | | are often used for tuition fees and then a further |
| their way through college, are starting to have a tough | | | | private loan is usually needed to cover general |
| time accessing funds. Increasing numbers of public and | | | | expenses. It is these private loans which will become |
| private lenders are pulling out of offering student loans, | | | | more difficult to obtain. As yet, there is no evidence to |
| affected by the credit squeeze and the declining profit | | | | suggest that lenders are failing to support their |
| of federal government backed loans for education. | | | | obligations to the federal loans. |
| There are reports of a state agency that has | | | | The effect of the credit squeeze will affect those |
| suspended a loans program that serves college | | | | families with poor credit ratings and lower incomes. |
| students. This will affect 100 universities and colleges | | | | The people who have been caught up in the mortgage |
| and there are fears that other agencies and colleges | | | | crisis may have children studying at college, who will no |
| may follow the same path. The reason given was the | | | | longer be able to access student loans because of |
| disruption of capital markets. | | | | their parents' credit score. |
| Student loans are usually supported by some of the | | | | It has been estimated that about 100,000 students will |
| major banks, including Goldman Sachs, JP Morgan and | | | | not qualify for private or government loans this year |
| Citibank, but they have stopped supporting the normally | | | | due to poor credit. Add to this the decreasing number |
| low-risk securities that student loans traditionally | | | | of companies providing student loans, and there will be |
| backed. Financial experts are predicting that student | | | | problems for many college students. The smart |
| loans will also become more expensive, as well as | | | | parents and students will start their search for student |
| being harder to access. | | | | loans early to ensure that financial aid is available for |
| The major source of student loans is a federal | | | | their higher education. |