Rising Mortgages, Falling Home Prices May Trigger Need For Alternative Student Loans

In recent years, as much as 5% of home equity tapped by homeowners has been used to fund higher education costs, according to the Consumer Bankers Association. Low interest rates on home equity loans combined with skyrocketing home valuations has made equity accessible and affordable. That may change as the housing market begins what many experts have called the "popping of the housing bubble".

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Quincy, MA (PRWEB) January 23, 2006

In recent years, as much as 5% of home equity tapped by homeowners has been used to fund higher education costs, according to the Consumer Bankers Association. [1] Low interest rates on home equity loans combined with skyrocketing home valuations has made equity accessible and affordable. That may change as the housing market begins what many experts have called the "popping of the housing bubble".[2]

With prices declining and interest rates rising, many families who borrowed against equity to pay for college education costs may find themselves with fewer equity-based options in 2006. Fortunately, alternative student loans may be able to fill the gap left by a decline in available equity.

Christopher S. Penn, director of http://www.AlternativeStudentLoan.com, said, "Here in the Boston area, we're seeing housing price cuts of enormous proportions, up to 20% of the sale price[3], driving down local home prices. Combined with 13 consecutive increases in the Prime Rate (based on the Federal Funds Rate), equity for education in 2006 may be less affordable for borrowers. Private student loans from AlternativeStudentLoan.com would be a great alternative for these families, with competitive interest rates, a simple application process, and funds disbursed in as few as five business days after receipt of a completed application."

"Most importantly, however, for parents who are already carrying a lot of mortgage debt, having yet another loan added to their burden might be too much. With Private Loans from Alternativestudentloan.com, the student is always the primary borrower, which is appealing to many parents," remarked Mr. Penn.

"38% of financial experts are predicting a Federal Funds rate of 5% or higher in 2006 [4], making the Prime Rate a sizzling 8%. Add 2% - 2.5% margin on top of that plus points and closing costs, and home equity loans and lines of credit (many of which are based on the Prime Rate [5]) look much less appealing to borrowers looking to finance an education. Private student loans, by comparison, have competitive interest rates, no points, no closing costs, no collateral and no out-of-pocket fees or application fees," said Mr. Penn.

Students, parents, and families interested in private student loans are encouraged to visit http://www.AlternativeStudentLoan.com or call toll- free 866-229-8900 for more information and a free application. Students who apply for the loan are strongly encouraged to have a creditworthy cosigner. For students outside the Continental US, call 617-535-7001; toll charges may apply.

Contact Christopher S. Penn at the Student Loan Network at 877-328-1565 or at cspenn@AlternativeStudentLoan.com. The Student Loan Network is a division of the Edvisors Network, a multi-national education services company offering students options for managing the entire education lifecycle, from getting into their college of choice to financing their education and beyond. The Edvisors Network is based in Quincy, Massachusetts, with offices in Quincy and London, England. Visit them on the web at http://www.EdvisorsNetwork.com for more information.

Other Student Loan Network Press Releases:

http://www.edvisorsnetwork.com/press.php

AlternativeStudentLoan.com loan products are funded by PNC Bank, N.A.

-End Notes-

[1] Source: http://moneycentral.msn.com/content/CollegeandFamily/Cutcollegecosts/P57351.asp Viewed 12/15/2005

[2] Source: http://biz.yahoo.com/fool/051216/113475243114.html?.v=1

Viewed 12/19/2005

[3] Sources:

http://news.yahoo.com/s/ap/20051223/ap_on_bi_go_ec_fi/economy
http://www.zwire.com/site/news.cfm?newsid=15767350&BRD=1343&PAG=461&dept_id=433660&rfi=6
http://biz.yahoo.com/fool/051216/113475243114.html?.v=1

Viewed 12/28/2005

[4] Source: http://www.businessweek.com/magazine/content/05_52/b3965426.htm Viewed 12/19/2005

[5] Source: http://www.bankrate.com/brm/ratewatch/leading-rates.asp
Viewed 12/19/2005

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