As if paying for college isn’t stressful enough. The lack of demand for student loans packaged for investors to buy is driving up the cost of funding for lenders, if they can raise the money to make the loans in the first place. Add that to lenders requiring higher credit scores for alternative loans and the fact that some families who are strapped were hoping to use now-dwindling home equity and collecting the cash for college is becoming an ever the more impossible endeavor.

This isn’t just hitting new students. Today, Student Loan Corp, owned by Citibank, announced it was no longer going to consolidate loans. Behemoth Sallie Mae made the same announcement last week. And that company is no longer paying the 1.5 percent origination fee for students.

Yikes! This is all stuff that higher education reporter Jeff Shelman and I wrote about in our student loan story that ran on the front page Saturday.

The New York Times had a similar story the same day.

How is this affecting you? Is this changing your paying for college strategy? For parents far from college, are you trying to save more now to ensure that your kid can go to school, even if it’s 100 percent financed by you?

This entry was posted on Wednesday, April 16th, 2008 at 10:06 am and is filed under college saving, kids and money. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.