By ANTHONY BOTTAN
What will the country's economic meltdown mean for graduating seniors who are trying to secure student loans for the rest of their education?
According to FinAid.com, a Web site that offers students ways to finance college, a total of 137 lenders have ended or suspended their participation in the federal student loan program because of problems in the debt market. Thirty-six lenders have suspended private loans, and even Sallie Mae, the largest student loan provider in the country, said it is tightening its credit requirements for borrowers.
"Despite the ups and downs of the stock market and the pinch of the current credit crisis, federal student loans are available to students and parents regardless of financial need, income or collateral," said Erica Ericksdotter, a financial expert for Sallie Mae. "We have significantly tightened our credit underwriting criteria under which we provide student loans. We encourage our applicants to apply with a credit-worthy co-signer because, oftentimes, that helps them qualify for the loan."
In a study of 1,400 students and their parents conducted by Sallie Mae in late August, 58 percent of families reported ruling out certain colleges because of their cost.
Alexandria Bottiglieri, a senior at East Rockaway High School, said that if lenders stop issuing loans, it will create a domino effect. "If most students can't receive loans, we will be forced to withdraw our acceptances," she said. "I cannot, with the help of my family's income only, pay for my college education."
Angelica Razack, a senior at North Valley Stream High School, said the current economic situation altered her choice of colleges. "I went from looking at private schools to SUNYs," Razack said. Other students at North, like Nicole Dipaoli, said the state of the economy has them worried about their future. "It makes me want to work harder to get a scholarship," Dipaoli said.
Cathy Bien of Lynbrook said that with three kids in college, it is getting harder to pay their bills, and lenders don't take into consideration how high household bills are when they accept or deny applicants for loans. "When you apply for financial aid, they don't take into consideration your mortgage or other household bills," Bien said. "My husband works two jobs and I work full time. The aid that is given out needs to be reformed to include everyday household bills. We are struggling to live in this economy."
Tom Casserly, a spokesman for Nassau Community College's financial aid office, said that the volume of loans issued at NCC over the past three years has steadily increased. "Anybody can get a student loan if they follow the process and meet the criteria," Casserly said. "The key is filling out the application. It is the application that opens doors." He added that students looking for financial aid must be U.S. citizens, cannot be in default on any federal loans, and must take classes earning a total of at least six credits.
A new free online tool called the Education Investment Planner - launched by Sallie Mae - enables families to estimate the full cost of a college degree, compare schools, determine whether they need student loans and project monthly payments. The planner asks a series of questions, prompting users to search through various funding sources. According to its Web site, it helps families follow Sallie Mae's "1-2-3 approach" to paying for college: first, make the most of scholarships and grants; second, fully explore federal student loans; and third, fill in any remaining gaps with private loans.
One worried East Rockaway mother whose daughter attends a four-year college said she does not know how they will pay for her ongoing education. "She's currently pursuing her master's," said the mother, who declined to be identified. "[My daughter] had planned to pay for it with savings that she has invested in mutual funds, but the recent fall of the stock market and the state of our economy makes it questionable whether or not she'll be able to afford her tuition."
Comments about this story? ABottan@liherald.com or (516) 569-4000 ext. 246.
