The Money Stop

Postgraduate students and those taking their second undergraduate degree may face financial problems due to the credit crunch as a number of lenders are withdrawing from the professional studies loan market, the National Union of Students (NUS) has warned.

There is very little state funding for postgraduate students and some of them take out loans to fund their studies, according to Directgov.

Speaking on students’ financial situations, the NUS said US bank Sallie Mae has already stopped providing new professional study loans and other banks may do the same.

Banks offering the equivalent of professional study loans in the UK may discontinue them if they want to reduce their exposure to risk.

Commenting on professional study loans, David Malcolm, head of social policy at NUS, said: “They are much bigger amounts of money and there is more opportunity to default on that. The types of students we are talking about are postgraduates and second undergraduate degree students.”

However, Mr Malcolm offered hope, saying that career development loans are likely to be protected as they are government backed and will not be as exposed to the global credit crunch.

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