From this morning’s New York Times:
“My hope is — is that people take a deep breath and realize that their deposits are protected by our government,” the president said. He added that economic growth “was not the growth we’d like” but expressed confidence that the country would overcome “a time of uncertainty.” The nation’s troubled financial system is “basically sound,” he added.
In other– apparently unrelated, according to the president– news, my school’s financial aid office called today.
It seems I need to pick a new lender for my subsidized Stafford loans. Bank of America, which was my lender for the 2007-2008 school year, is no longer an available option.
I was under the impression that Bank of America had only suspended their private student loans, and would continue to issue federally-guaranteed loans, such as the Stafford.
However, I just found an article that states
Be particularly vigilant if you’re attending a smaller college with a higher drop-out rate, Kantrowitz says. Higher drop-out rates usually lead to more loan defaults, and some lenders are cutting off relationships with such schools.
This reminded me of something else I’d read: community colleges will most likely bear the brunt of our basically sound sluggish economy. Two-year institutions unfortunately have a risky and unattractive (to lenders) combination of low tuition rates (smaller loans = less overall profit) and greater risk of loan default.
I’m guessing that’s what has happened with my Bank of America Stafford loan.
And yes, this is all very scary. I hope the banking and student loan systems manage to keep themselves together long enough for me to get my Bachelor’s degree!
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