With the 2008-2009 school year just around the corner and the credit crunch tightening lenders' belts, students are turning their pockets inside-out to find adequate finances for their education. But the latest in lending alternatives might surprise you. Some private companies are utilizing the social networking phenomenon to aid students in their quest for financial aid.
Sites like Fynanz provide "peer-to-peer" lending services for students and private lenders alike. Students are encouraged to create a profile indicating their educational and personal goals, as well as their anticipated finances. Individual lenders, whether private benefactors, family members, friends, or alumni, can contribute to students' loans in an interactive online marketplace.
According to this article about the twist on student loans from eSchoolNews.com, "Fynanz, which debuted in March and currently operates in 16 states, called itself the first such service to target student loans. The site evaluates students for credit risk and matches them with an individual investor or investors, who bid to finance the loans."
For more information about financial aid, go to eCollegeFinder's student loan page.
Many students need financial assistance in order to pay for tuition. When considering student loans, there are many options including federal and private loans. Before applying for a loan, it is important to consider
which loan is right for you.
Federal Loans: The Options
- Stafford Loans: regulated by the government; usually accompanied by low interest rates; interest is paid until end of pre-determined grace period
- Perkins Loans:smaller than Stafford loans; must apply for a Pell grant first; interest rates generally around 5%, and payment period is negotiable
- PLUS Loans: not federally subsidized and therefore have higher interest rates
Parent PLU: these loans cover total amount of tuition; repayment is soley the parent's responsibility
Graduate PLUS: for those that are in graduate or professional-level degree programs, this loan is ideal; repayment is soley the graduate student's responsibility
Private Loans: The Options
- Loans given by private institutions, individual lenders, or banks
- These loans vary and eligibility is determined by the individual's creditworthiness
- Interest rates vary
- Payment period determined by individual lender; either payable immediately or payment upon graduation