How The Credit Crisis Has Hit Home Here

Alternative educational loans, those instruments that used to be fairly rare but are now used as a funding option for about 23% of the students on my campus and which are simply private eduational loans with no government protections, are harder to get and current approvals are no guarantee that the lenders will actually disburse the money.

My university has recently alerted campus student aid officers like me that two major alternative lenders have informed the main student aid office that any loans currently approved but not disbursed will not be disbursed. Those students are, at this moment, scrambling to find other lenders to cover balances that they had done everything right to cover weeks ago.

And what might be their difficulties with that?

First, we have received numerous emails from lenders who are continuing to lend that the credit checks for both students and their co-signers will be a much more rigorous review and will result in many more denials in addition to much higher fees and interest rates for those approved but with the lowest credit scores for approval.

Second, the list of alternative lenders that we used to give to students has decreased from about 30 different lenders to 11.