Selecting Your Student Loan

As college acceptance letters arrive these days, families are celebrating the good news. But also, some of the start to worry about how to finance college.

Indeed, the student lending market has experienced two dramatic blows last year:

• Amid the subprime mortgage crisis, funding for all kinds of loans has dried up.
• The College Cost Reduction and Access Act of 2007 cut government subsidies to issuers of federal student loans.

In order to help you finding the financial resources to finance college, here are some great tips.

Start federal
With smaller fees, lower interest rates and better terms than private student loans, federal loans are still the best option for most borrowers.

Check your state
More than 30 states have programs to provide federally backed and other education loans to residents or in-state students at competitive rates.

Avoid private student loans
With lenders feeling pinched, expect a big marketing push for their higher margin product, the private student loan. But experts agree that those loans should be a last resort because they carry high variable rates and fees.

Look at your home equity
Don't forget you can refinance your home (if you own one)! You could use a part of the equity of your house to finance college. You will get access easily to the money, and will have a more favorable interest rate than most of the student loans have.

Need to know more about how to use your mortgage to finance college? I will be pleased to advice you.

Senate to help in housing crisis

Senate leaders are working on a package of legislation to help the homeowners on the edge of foreclosure. The fact is that around 4.2 million mortgages were either past due or in foreclosure while 2007 was coming to its end, and 3 million more may deault in the next few months.

The rescue proposals include:

• $10 billiion in tax-exempt bonds to refinance subprime loans
• $4 billion to local governments to buy foreclosed properties
• $15,000 tax credit for purchases of foreclosed homes or newly built homes that have been sitting vacant.

The main goal of this effort is to transform risky subprime mortgage that borrowers can't afford into traditional 30-year loans.