Student Loans Are Becoming More Costly

In his article "Student Loan Market Faces Scarce Times" Andy Miofsky discusses the anticipated reduction in the number of lenders that will continue to provide guaranteed student loans.

On the heels of this news comes a report in the Washington Post that Sallie Mae, the largest student loan provider in the country, will begin charging an application fee to borrowers.

The fee, which Sallie Mae will begin charging next month, will range from $35.00 for undergraduate students, to several hundred dollars for graduate students.  Until now, processing fees for student loan applications have been absorbed by the lender.  It is believed that other lenders will follow Sallie Mae’s lead and begin charging processing fees.

Sallie Mae also announced that it will no longer offer debt consolidation loans to former students, focusing its lending on current students.

Critics have suggested that these moves are an effort to force Congress to reinstate Federal subsidies to student loan lenders that were recently ended.