With the credit market tighter than it's been in years, industry experts are predicting that student loans will be more expensive and harder to get for students looking to pay for the fall 2008 semester.

According
(subscription required) to the Wall Street Journal, "Some observers are convinced that if lenders dependent on asset-backed securities leave the market, big banks with other sources of capital will step in and fill the void, especially for loans guaranteed by the federal government, which accounted for more than three-quarters of the $77 billion that students borrowed for the 2006-07 academic year."

But students and their parents should look at a tightening of the student loan market as a good time to reassess priorities and consider alternatives means of paying for college or cutting the costs of education. For a long time, there has been a wide discrepancy in the lending market. Students have been allowed, and often encouraged, to borrow far more money to finance their educations than is necessary or intelligent.

Unfortunately, this has led to some poor decisions: people taking out massive amounts of loans to attend private colleges when they could have gone to public colleges with no loans. Other students live in more expensive off-campus housing or lead relatively lavish lifestyles while they accrue large amounts of student loan debt.

The credit crisis is a good time to get real. Loans can be an OK way to pay for college but there are a lot of better ways: looking for less expensive but comparable alternatives to name-brand colleges, work-study programs, working hard during the summer and ::gasp:: saving the money, and living a generally frugal lifestyle during college.

College can be a good time to develop the habits that will lead to future financial success, and borrowing massive amounts of money when you don't need to is not a good habit to develop.

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