Loans Expert

The Massachusetts student lending authority announced this week that it will stop issuing private student loans, a move that could affect Connecticut students who attend school in the Bay State and rely on the agency for loans.

But Connecticut officials say those students should be able to obtain other loans, in part because Connecticut’s student lending agency remains in good shape.

The Connecticut Higher Education Supplemental Loan Authority, or CHESLA, offers state-backed loans to students from or attending school in Connecticut. It now has nearly $20 million to lend, and officials will begin working on a $45 million bond issue next month to replenish the lending pool, executive director Gloria Ragosta said Tuesday.

Despite the government’s effort to alleviate the financial burden coming from college tuition fees, the student loan interest rate for the second semester of this year is expected to exceed 8 percent.

The Ministry of Education, Science and Technology said yesterday that the student loan rate, which stood at 7.65 percent in the first semester, is likely to hit the 8-percent mark in the next semester, as the five-year treasury bond, which has a decisive impact on student loan rates, recently soared.

Gov. David A. Paterson yesterday called for a publicly financed, low-interest student loan program, saying New York has fallen behind other states in making college more affordable for its residents.

“We are the largest urban state that doesn’t have these loans, the only large state in the union that doesn’t have them, the only state in the Northeast that doesn’t have them,” Paterson said. With the economic downturn, “this is the kind of remedy that we’re going to need during this crisis.”

Kitchener-Waterloo — If you have a large student loan debt that is more than seven years old, you can now have it forgiven by a bankruptcy, according to personal insolvency professionals at PricewaterhouseCoopers (PwC).

Under amended Canadian federal bankruptcy laws which came into effect on July 7, 2008, if your student loans are older than seven years, they can now be forgiven or compromised by filing a bankruptcy or consumer proposal with a licensed trustee in bankruptcy. As well, there are changes to the law which may see your student loans forgiven after five years if you are experiencing significant financial hardship.

IFC, a member of the World Bank Group, is partnering with Commercial Bank of Africa Ltd. and Strathmore University in Kenya to introduce a new student loan product.

This will reduce the financial burden on students at the university, including those from lower- and middle-income families who are eligible to attend university but cannot pay the entire tuition costs upfront.

Kenya has seen a growing demand for tertiary education, with a steady rise in enrollment and an increase from three private universities in 1985 to 21 in 2008. But a quarter of eligible applicants are denied admission because they are unable to pay tuition upfront.

The online application process for student financial assistance will be improved this year, the Ministry of Advanced Education, Employment and Labour announced this week.

The student loans application system through the provincial government will now have a broader operating system, meaning it will be compatible with the Mac operating system and Apple’s Safari browser.

The online application system was introduced last year and has enhanced the speed of the student loans process, increasing the turnaround time to one week during the summer, which is the busiest season.

Minnesota Society of Certified Public Accountants

Are you or someone in your family facing heavy student loan debt? Recent graduates left college with an average of $19,646 in student loan obligations, according to a study by the Project on Student Debt. That was up 8 percent from a year earlier, while average starting salaries rose only 4 percent from the previous year, the study found. That means the debt graduates are carrying is growing faster than their initial chances to earn the money to repay it.

According to a study by the Project on Student Debt, recent graduates left college with an average of $19,646 in student loan obligations.

“Unfortunately, some graduates have additional credit card debt or car loans,” says Ken Shapiro, certified public accountant (CPA) and a certified financial planner..

As a first step toward mature, financial independence, Shapiro recommends that new graduates develop a financial plan. “Work out a budget,” he says. “Determine what your real needs are. Figure out how much you can afford to pay down. Pay on time so you can build good credit.”

CHICAGO – The University of Chicago is cutting ties with Illinois’ student loan agency, forcing the school’s graduate students to look for new ways to obtain loans.

The university on Wednesday told students the Illinois Student Assistance Commission was unable to renew its line of credit because of the national credit crunch.

A third of the University of Chicago’s graduate students, or about 3,000 people, will now have to apply for loans for the fall semester through other lenders. School officials say students should still be able to secure federally subsidized loans. However, the students may not get as good loan terms.

HA NOI — Deputy Prime Minister Nguyen Thien Nhan will establish inspection groups to examine the implementation of student loan policies in various cities and provinces with extraordinarily high and low levels of outstanding loans, according to the Government Office.

Members of the inspection groups will include representatives of the Ministry of Education and Training (MoET), the Ministry of Labour, Invalids and Social Affairs (MoLISA) and Viet Nam Social Policy Bank.

The inspections are scheduled to be completed by the end of the month.