Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Private student loans can be very costly

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August 26, 2005

Private student loans can be very costly

If you are student looking for a loan, be very careful where you get your money from. Many students, especially those attending trade schools, turn to private financing, instead of federally regulated loans. Often, these private funds are the only ones available for many students who, somehow, are not eligible for Stafford or Perkins student loans.

Private lending grew very rapidly between the 1995 and 2004 school years, according to a College Board survey, from $1.3 billion to $10.6 billion. Private loans now account for about 9 percent of all student financial aid.

There are several problems with non regulated student loans. Sky high interest rates, immediate repayment while student still in school and incomplete disclosure of terms and conditions are the main problems. Some lenders are being investigated for failing to properly disclose terms and conditions of the student loans they have given. Read more at NewHouseNewsService.

Posted in Student Loans at August 26, 2005 04:18 PM

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