Student Loans: Get Them While You Can?

It may become much harder to get student loans in the next 3-6 months. In fact, without some kind of government-backed solution, some even think it may become impossible.

The Student Loan Mortgage Corporation (NYSE: SLM), also known as Sallie Mae, just posted their 1st quarter earnings. Along with the earnings came a dire warning from the firm's top executive.

According to Albert Lord, Sallie Mae's CEO, "Today’s environment is the most difficult we have seen in our 35-year history of student lending... It has become obvious that we can only meet the enormous student credit demands we are seeing at Sallie Mae if there is a near-term, system-wide liquidity solution.”

This should be taken seriously since Sallie Mae is the leading originator of student loans in the nation. In fact, they originated 8.7 billion dollars of student loans in the first quarter of 2008 alone.

Additionally, according to Sallie Mae, they are seeing a huge increase in the number of people applying for loans. In large part, this is probably related to the overall economic downturn, but will likely increase as people realize funds are in short supply.

Long story short, if you think you might need student loans, you need to get on the ball and apply. The Federal deadline for student loans is June 30th.

With government subsidized rates as low as 5% on Perkins Loans, and Stafford Loan rates as low as 6.8%, now may be the time to act.

All Federal loan programs require you to fill out a FAFSA form on-line. It takes 20-30 minutes, but will help you to know what your loan options are.

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