Student loans OK despite financial crisis

LIMA - It doesn't look like the current financial crisis will impact those applying for student loans. Yet, local financial aid officials are keeping a close eye on things.

"We are always in contact with our lenders and things have been changing so often that nothing is set where we have a definite idea of what is happening," said Melanie Weaver, Ohio Northern University director of financial aid.

The big concern is families directly applying for private loans at banks. Officials are confident federal loans will stay intact. Weaver said most students use federal loans, although some need to supplement them with private loans.

No federal programs have been eliminated, Weaver said, and the government has taken measures to make sure funds remain available.

"The federal government certainly made sure with some recent regulations that there will still be funding," she said. "And they have extended some regulations to make sure there are funds available."

Funds are unlimited in the Stafford Federal Student Loan program, Bluffton University Financial Aid Director Mary Cannon said. The government is committed to the program, she said.

While it has not happened locally, Cannon has heard of students seeing delays in getting their funds, although the money eventually reached them.

Good credit remains most important, officials said. Credit requirements for loan approval at some banks have become tougher, Weaver said

"I think the concern will just be making sure families understand that there are credit aspects attached to most student loans," she said.

While it always has been important for students to have a co-signer with good credit, it is even more so today.

"That credit-worthy co-signer is going to not only ensure the loan, but it is also going to secure a better interest rate," Cannon said. "Of course, those markets are tighter and credit restrictions are tighter, but a credit-worthy co-signer is going to be the best option."

Most loans have been dispersed, the peak times being July to September, said Mary Kay Bean, media relations director for Chase Bank.

"We have a pretty big window of time to see how the markets react," she said.

Some banks no longer deal with student loans, but Chase Bank continues to do so.

"We will need to see how Congress handles things going forward," Bean said. "We have told the schools that we are committed to supporting student loans. Obviously everybody needs to see how things shake out."

Cathy Kohli, Rhodes State College's financial aid director, has seen a decrease in the last few months in the number of lenders.

"The choices have slimmed down for students," she said, adding that many reasons might attribute to it, including lenders not having the funding.

A tough economy can be good for some schools like Rhodes, Kohli saying enrollment tends to go up.

"There are displaced workers, plants close," she said. "That increases our enrollment because students are there building their educational skills for the workforce."

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