Impact of Credit Crunch
You may have seen articles and news reports about how recent difficulties in financial markets and the sub-prime mortgages markets could be affecting the availability of student loans for the 2009-10 academic year. We want to assure you that Alma College has been following this situation closely. While some lenders have announced that some programs may be cut back or even suspended, we are very confident that there will still be Federal federal and private loans available in the marketplace throughout the 2009-10 academic year.
Federal Loans: Stafford and Parent PLUS loans will still be available and are backed by federal guarantees to the banks who fund these loans. While it is true that some banks have announced that they are suspending these programs, less than 75 lenders out of the more than 2,000 lenders nationwide have done this. Alma College has received assurances from all of our lenders and banks that they will have funding for Federal federal student loans. In fact, Secretary of Education Margaret Spellings has also reported to schools that there has have been no instances of students unable to obtain a Federal Stafford loans due to current market conditions. The Government government has in place several fallback provisions that will ensure continued student access to these programs and are is working closely with banks to ensure no loan disruptions.
The Federal Parent PLUS loan in many cases offers many favorable terms and benefits not available in other alternative loan products. Often in many cases you will find a PLUS loan to have a lower interest rates and provide borrower protection provisions that alternative loan programs do not include. The Federal PLUS loan program has interest caps lower than many alternative loans, and fees charged are usually the same or even lower what than most alternative loan programs charge. We have always encouraged students and families to pursue Federal loans.
