College in the Balance: Are Citibank Student Loans A Good Choice For Students?
By
The Student Loan Staff
The cost for a college education is going up every year and will not decrease any time in the near future. Most students have almost become used to the yearly tuition increases imposed by colleges and universities. As a result very few students make it through college without some sort of financial assistance. Most scholarships and grants fall short of college financial obligations. While tuition may be covered, often the hidden costs, books, room and board are often not part of the package. That is why the federal government and many state governments offer low interest student loans. Understanding Student Loans Student loans differ from most other kinds of loans. There are three basic types of loans: loans directly to students, loans to parents of students and private loans. The direct guaranteed by the Federal government are probably the most used resources although many parents prefer the financial obligation be on them. A student loan, such as Perkins Loan or a Stafford loan is a loan that can charge no higher than about 8% interest. These loans do not start to require payments and accrue interest until six months after the student graduates. Though students are encouraged to pay down the loan while still in school, it is by no means a requirement. This is why are an easy way to finance college and graduate school. But that does not mean there are no risks. Finding a Lender While come from federal and state government, the funds are administered by in large by private lending institution. One such institution is Citibank. Citibank are second in number to Sallie Mae, another lending agency that is part of the multi- billion dollar a year industry. Citibank come with many services to help the person looking to finance their education. They offer a

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Last-Minute Withdrawal by Lenders Leaves Students Scrambling for Student Loans
On July 28, just a few weeks before the fall semester gets underway, some 40,000 college students in Massachusetts suddenly found themselves facing outstanding tuition bills with no money to pay them, when the nonprofit Massachusetts Educational Financing Authority announced that it wouldn?t be able to provide any private student loans for the upcoming semester. MEFA, the largest issuer of student loans to Massachusetts residents, had already suspended its federal student loan program back in April.
Faltering Economy Eroding Consumer Confidence in Student Loans
Some banking industry experts have long regarded the federal student loan program, established in 1965, as one of the most successful public-private partnerships ever created. A historically steady and reliable source of financing for parents and college students needing help paying for school, the federal student loan program also used to be a mostly risk-free and profitable venture for private lenders issuing government-backed student loans.

variety of helpful services in order to inform the consumer about what the probable cost will be for their education. They have debt calculators and other research papers on their website that offer an abundance of information for consumers. Citibank have been made considerably more above board following the settlement of a law suit brought by the State of New York against them and several other lenders. This settlement insured that there would be no collusion between colleges and Citibank to sway students toward their services. New York University was ordered to pay back over one million dollars in monies it received from Citibank for direct service to its students. They were also required to state in large print that students are not required to borrow money from only members of their preferred lender list. In this way, colleges maintain neutrality in the process and put the interests of the students over the interest of the lenders. By voluntarily settling, Citibank has corrected its behavior and offers a product with more integrity. Self-policing and watchful regulators are insuring consumers that they are getting the best deal they can for their interests.