Credit crunch hits student loan business

NEW YORK, Sept. 29 (UPI) -- The U.S. credit crunch has pushed dozens of banks out of the tuition loan business, forcing many potential students to look for work, advocates said.

"The credit crisis has had a tremendous impact on student loans," Keith Alliotts, of TuitionBids.com, told the New York Post.

In the past 12 months, 33 banks and lenders have permanently or temporarily closed their student loan businesses and more than 100 lenders have cut back or eliminated their involvement with federally guaranteed student loan programs, the Post reported Monday.

"It's hard to find anyone doing student loans because so many have left the space," Alliotts said.

Students, such as Kristina Fernandes at New York University, have to cut back on studying to work at jobs to cover loans, the Post said.

Fernandes is working two jobs to help cover an $8,000 loan with an 18 percent interest rate she was forced to take to cover expenses for the fall semester, the newspaper said.