Students looking for loans may find help in BorrowSmart program

KeyBank will no longer offer private loans for students because of the long-term unstable credit market.

Existing loans from KeyBank will still be honored through the rest of this and the Spring 2009 semesters. After Oct. 31, KeyBank will stop taking applications for private student loans.

Students usually apply for private student loans when they cannot get more money from federal loans.

Mark Evans, student financial aid director, said about 2,000 to 3,000 Kent State families have private student loans. Ninety-five percent of those families get them from KeyBank, CitiBank or Sallie Mae. Kent State works with these banks to provide private student loans.

“Over the years, the cost of going to college has increased,” Evans said. “More students and their families turn to private loan programs to gain access to additional funding.”

Laura Mimura, vice president of marketing and communications at KeyBank, said the bank will still participate in the federal loan market.

“We are still making loans to students to go to Kent State through FFELP (Federal Family Education Loan Program),” she said. “Students at Kent State and other Title IV schools can get Stafford Loans and Federal PLUS loans.”

To assist students in minimizing debt, Mimura said a service called BorrowSmart may help. BorrowSmart’s program helps minimize debt by looking at available grants and scholarships, then students can calculate the amount they can pay per month. To access BorrowSmart, students can go to www.key.com/borrowsmart.

Mimura and Evans both said students have to be informed and do research to get the financial aid that works for them.

“You have to do the work,” Mimura said. “This (BorrowSmart) is not a magic pill.”

Evans suggested students go to the Kent State Student Financial Aid Web site, www.sfa.kent.edu, for current information on available aid. He also said students should come to the financial aid office and talk to a financial aid representative if they have questions.

Mimura said KeyBank’s decision to exit the private student loan market was made about a year ago.

“We are still committed to education,” Mimura said. “But we have to make decisions to protect the strength of Key.”

Although some students may have to apply for private student loans from a different company next year, Evans said students shouldn’t be worried about getting another loan.

“There is no need to worry or panic or those types of things,” Evans said.

Contact student finance reporter Kristina Deckert at

[email protected].