The College Planning Blog

In the past few months, largely in response to the credit crunch precipitated by the subprime mortgage crisis, some homeowners have been receiving letters from their lenders indicating that their home equity lines of credit have been frozen. In some cases, these freezes may be the result of missed payments (even missed payments on other debts) or declining home values in the area, but that’s not always the case. Many freezes are happening to homeowners with homes that have not declined in value, and who have impeccable payment histories and credit records. (more…)

According to this article at the Seattle Business Journal WaMu is shutting down or reducing customers lines’ of credit. Bad news if you were planning to use a HELOC to pay college expenses.

WaMu reduces home equity credit to homeowners

This is not completely unexpected, but for many may be unwelcome.

Hi everyone, Brannon here.

Some interesting changes are coming to Federal Aid due to the current student loan Crisis. The federal government is trying to open things up for families. But keep in mind their answer is offering more debt.

To accomplish this, the Act grants the Secretary of Education temporary authority to purchase loans from lenders in the federally guaranteed loan program (officially called the Federal Family Education Loan Program) if the Secretary determines that lenders can’t meet the demand for student loans. The Act also authorizes the Secretary of Education to advance federal funds to guarantee agencies that are operating as “lenders of last resort” in the event they don’t have sufficient capital to originate new loans. The Act also dispenses with the requirement that students demonstrate an inability to borrow from other sources before turning to a lender of last resort.
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