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Student Loans Aren't the Only Choice to Pay Tuition Bills

Francine L. Huff
LoanBiz Columnist

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Wachovia is just one of many lenders that have recently announced that they will stop issuing some student loans. In Wachovia's case, it plans to stop accepting applications for private undergraduate student loans, but will continue to write federal student loans. But with so many lenders getting out of the student loan business, students and their parents may need to find other funding sources to help pay tuition bills.

 

Look for Free Money

Even though the school year is about to start, that doesn't mean people shouldn't still be looking for as many grants and scholarships as possible. Some scholarships and grants have rolling deadlines, making it possible for students to win additional funds after the fall semester has begun. That can be especially helpful when someone has lined up enough funds to pay for their fall semester but will come up short the next one. Students should check with their school's financial aid office, local and state governments, employers, and other private organizations to see what's available.

 

Student Credit Cards

While it's never ideal for students to run up huge levels of debt on credit cards, there are times when having one can be helpful when paying for education costs. Student credit cards can be used in a pinch to pay for expenses that aren't covered by private and federal student loans, such as personal expenses and transportation costs.

 

It's important to shop around and compare the terms on different student credit cards. Some cards offer cash back on purchases or other rewards, but it's important to make sure they don't charge high interest rates and fees for the privilege. Even though students over 18 may qualify for a card on their own, having a parent co-sign on the application may result in better terms. Parents should establish some rules for how students use credit cards to avoid overspending. Limiting credit lines is another way to help students learn good money management skills.

 

It's not very encouraging to see so many lenders withdrawing from the student loan business. But there are still federal and private student loans available from many lenders, as well as other sources of funding for people in need.

 

Sources:

CNNMoney

"Wachovia To Stop Writing Private Undergrad Student Loans," www.money.cnn.com.

SallieMae


About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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