We're getting a large increase in the number of calls about student loans. The lending market is essentially frozen because of the fallout from the mortgage crisis. Are you still trying to figure out how to pay for college this fall? Clark has 2 important pieces of information to share with you.

There's emergency legislation working way its through Congress that will allow the federal government to be the "bank" for educational loans for this fall. Clark has full faith that this legislation will be pushed through in time for school.

Yet federal loans may not cover a tuition bill in its entirety. You can try to get a private loan, but very few private lenders are disbursing funds. So where do you turn? Try the peer-to-peer online lending sites where you can borrow directly from other people and cut the banks out of the equation.

Here's how they work: A borrower posts the amount they need to borrow; their credit rating; their debt-to-income ratio; and how much interest they're willing pay. Multiple lenders can then log on and each lend just a fraction of the money to limit their individual risk. Prosper.com is one of the most popular sites for this sort of thing. Clark also has a list of other P2P lending sites available.

There's a lot of tumult in the student loan market right now. Because of fallout from mortgages, many educational lenders are not able to borrow money to service their customers. One lender recently went bust and left students stranded high and dry with their tuition checks bouncing. Other lenders are not even making loans for kids going to college this fall. While this is a problem, it's not the severe crisis you might imagine. The U.S. Department of Education is required to step in and pick up the slack with loans.

Meanwhile, 8 of the top 10 lenders are no longer doing consolidation loans. Yet there's a great opportunity here for those who haven't yet consolidated their loans. Wait until after July 1 and you can fix your rate at 3.25%. That's tremendous.

Just know that trying to secure a loan for next fall will be like going through a funnel. Clark's advice is to start early. Take care not to borrow too much. Doing so can create a back-breaking financial burden in your 20s. Clark advises students to do college on a 3-year or 6-year plan. With the former, you take summer classes and eliminate 1 year of living expenses. With the latter, you work nearly full time and go to college part time. You also pick up great work experience and defray the cost of your loans along the way.

Clark recently told you that there have been changes in student loans laws. Now the latest news is that the student loan market is drying up as fallout from the housing crunch. Michigan has completely shut down its student loan program. The reason here is that student loans are funded by bonds or securities, the trading of which has been hurt by our slowing economy. So the credit squeeze is affecting areas that are completely unrelated to housing.

Clark has a thought that may seem callous to some. He believes there's an advantage to student loans being difficult to get. Think about it: College costs have grown way beyond the rate of inflation because it's been too easy to borrow for school. But if students have a hard time getting money, then schools will be forced to rein in their spending and become more efficient. They'll also have to deliver an education at an affordable price. Previously, the unlimited spigot of student loan borrowing provided no incentive for them to do so; the very oversupply of money fed the rise in college costs.

The teller window on student loans is being closed slowly but surely. Lenders are worried that they can't sell off the loans because of the slowing economy. They also have data telling them which schools have the highest default rates. It goes without saying that they won't make loans at some schools based on that information! The upside here is that it's getting easier to get rid of existing student loans. Clark's advice is to wait until after July 1 and refinance your federal student loan when the rates reset. The best guess is that rates for federal loans subject to consolidation will be between 4-5 percent. Compare that to consolidating now; when you'd get a rate that's more than 8 percent. So keep paying at your variable rate and lock it in low over the summer. Meanwhile, a new law guarantees full loan forgiveness for those who go into public service and make 10 years of on-time payments. There's more information available at the U.S. Department of Education's website or in Clark's own guide to the College Cost Reduction and Access Act.

One of the hottest areas of Clark's site is his 529 Plan Guide. He's now made his fourth revision to this invaluable resource so that you can continue being "Clark Smart" when saving for a child's education. The idea behind 529 Plans is that the money you save will grow tax-free and can be spent tax-free on college education. If the child doesn't go to college, you can transfer the plan to another child for free without being taxed. If there are no other children you want to have the money, you can use it yourself. But beware that you'll pay a 10 percent penalty plus tax if you take this latter option.

All 529 Plans must have state sponsorship, but you're not limited by where you live as far as making contributions. You may, however, enjoy a state tax deduction if you select your own state's plan. 529 Plans are great when they're purchased correctly. But a lot of money goes in the wrong way through commissioned salespeople, banks, stock brokers and financial advisors who take a cut of your money. You should buy 529 Plans directly through the state that sponsors them. If your state isn't listed in the "Honor Roll" section of Clark's guide, pick a state from his "Dean's List." There you'll see plans from Utah, Iowa and New York. These are the lowest-cost plans available across the board. Utah is by far the single best plan in the country. One of the most unique things about 529 Plans is that they're all very flexible. You can put in as little as $15/month or a rich grandparent can pop in as much as $60,000 all at once. One caveat from Clark: Do not save for your child's college education until you save for your own retirement. There are no scholarship plans for retirement!

Sometimes it takes a scandal or two to change an industry. After hearing about all the bank kickbacks to schools and dirty deals on campus in the student loan industry, there's finally some good news coming. The House and Senate have a plan that will disburse $5 billion that the banks stole from taxpayers, students and parents through their atrocious student loan practices. The plan will be phased in over a number of years and has a lot of great provisions. First, the interest rate on student loans will drop from seven percent to just over three percent over the next several years. Second, there will be new procedures in place by 2009 for the PLUS loans that parents take out. The new rules will be very clear and banks will have to bid against each other for the right to write these loans in each state. Third, there will be a loan forgiveness program that amounts to $4,000/year for teachers of science and math and any teacher who works in a high-needs public school. Finally, members of the military, law enforcement, firefighters, nurses, public defenders, librarians and early childhood teachers will be granted full loan forgiveness after 10 years. That means their balance will be wiped away if they make the minimum payments on time for a decade! The best part of it all is that not one cent for these programs will come out of taxpayers' pockets. All the funding is coming from the money the banks stole in the first place.

For several weeks, Clark has been talking about the shameful college loan programs that have been duping students into high-interest loans. Well, now that one of the largest banks in the country has been named in the scandals, the story has made national news. Citibank is the latest shoe to fall in this ongoing travesty, and a number of schools in the Northeast must now pay back students who were overcharged on loans. The University of Pennsylvania, NYU, Syracuse, St. John’s and Fordham are just a few. You would think that the financial aid office at a college would be the safe zone. But it’s just the opposite. Colleges have been cheating you - and your son or daughter - so administrators could earn kickbacks from the banks. Clark thinks people should go to jail over conduct like this. Instead, the banks get a slap on the wrist and never have to admit to any wrongdoing. And, the layers just keep shedding. In addition, people with no kids in college and no student loans are still paying huge subsidies to banks to pay for those loans. It’s out of control and it calls our current tax system into question once again. Now would be a great time to revamp the tax code so the system is fair to taxpayers and does not allow for the lining of legislators’ pockets.

What’s up with the current student loan system these days? Well, federal subsidized student loans are dropping to about 3.4 percent! Interest rates had been bumped up to more than 7 percent by the last Congress, and it was part of a corrupt, political move to pad the pockets of bankers. Thankfully, the new Congress is reversing that. As you probably expected, banks are livid. They want rates to be higher so they can make more money. But the outcry of the people will hopefully prevent them from winning out. This is for people taking out money going forward, so shop around before you settle for a rate.

The federal student loan program changed drastically in 2006, as you may or may not know. Interest rates charged to students and parents effectively doubled. So - before it happened - many people were able to lock in lower rates before the deadline, June 30. If you didn't lock in before that time, it seemed pretty hopeless that you'd get a break from the new, higher rates. But hope springs eternal! There is one last opportunity to lock in low rates. You won't get the super cheap rates that were available before July 1, but they are the ones available to people who graduated from college in 2006. Basically, you’re given 180 days after graduation to lock in that rate, and the most you’ll pay is about 6.5 percent. But if you shop around, you could beat it by a lot more. One great site to try is myrichuncle.com. So, don’t let those 180 days pass you by. If there is less student loan money floating around, colleges are less likely to raise tuition. That is the good side of the rate hike, so try to look at it that way.

You’ve probably hear about the new federal law boosted student loan rates for parents and kids. Parents’ rates went up about 80 percent, and that won’t be coming back down. The good news is that the rates – 6.8% for students and 8.5% for parents – are the maximum rates. In other words, people in the lending business can undercut those rates. And one site - myrichuncle.com - is offering discounted rates. So, check it out.

The changes coming in the student loan program affect people who already have loans AND those who are taking out new loans. It’s a major overhaul and you need to pay attention regardless of your situation. Clark wants to give you a recap. Recent college graduates normally wouldn’t get around to consolidating their loans for about six months. But that luxury doesn’t exist for them anymore. They need to lock in their rate immediately because come July 1 the rates will go up dramatically. People in that situation can lock in for about 4 percent. Those who graduated more than six months ago or who dropped out of school a while ago and never consolidated can lock in now for a little more than five percent. If you took out a PLUS loan for your child, you want to consolidate as well. You will fix the loan at about 6 percent instead of paying the new, higher 8.5 percent rate. If you have a son or daughter in college right now, you want to do what’s called in-school consolidation. That normally wouldn’t happen until about six months after they graduate, but things are different now. You will avoid the much higher rate that goes into effect after July 1. To get started, click here. It's a government site that will walk you through the process.

The student loan program as we have known it comes to an end June 30. It will be replaced with a new program that has extremely high rates and it will negatively affect people taking out loans this fall. For those who have been in college or are about to finish college, you can avoid the high rates. All you need to do is what’s called an “in-school consolidation.” To do that you must give up your six month grace period and lock in RIGHT NOW. Don’t wait until June 30 because everyone will be trying to do it around that time. Again, this is the last time you’ll be able to lock in at a decent rate. The new rates are going to be much higher. For parents taking out loans, the rate will be 8.5 percent. For students, it will be 6.8 percent. But if you lock in right now, your rate will be between 4 and 6 percent. Normally, students don’t think about doing anything for six months after they graduate because of the grace period, but you need to act now. For more information go to, loanconsolidation.ed.gov. And, Get Clark's latest update.

Students are taking on 50 percent more debt than they did in the 1990s, according to USA Today. At the time the debt is accumulating, students don’t notice it much. But once out of school, the debt becomes a huge burden. It’s affecting their ability to buy homes, get married and save for retirement. Clark encourages people to follow their dreams and go back to school if that’s what will help them get there. But student loan rates are going up because of a new federal mandate. So, if you are in school or thinking of going back to school, consider scaling back on the extras many students have nowadays. Living in a great place and living it up on the party scene may have to take a back seat. Spending the first two years of college at a community college is another option. They are the same classes and you cut your college costs in half by doing so. Transfer to a better school your third year and work while you’re there. There are ways to reduce the burden. Check out the changes to the student loan system.

If you have a son or daughter in college or you are a college graduate, you should be aware that major changes are happening with the country’s student loan program. If you are a student right now, you’re probably paying about 4.7 percent on your loans. If you’re a graduate, it’s about 5.3 percent. And parents are paying about 6 percent. But under the current legislation, student rates are jumping to 7 percent and parents will be paying more than 8 percent. The good news is that you’ll have through June to lock in the old rates. It’s called a loan consolidation. The disadvantage is that you’ll lose the deferment of interest and payments. But at the same time, you’ll have much lower payments for many years to come. Clark will keep you posted on how to consolidate under the old system once the new bill is signed into law.

People responded excitedly when Clark talked in the spring about locking in student loan rates. Graduates could lock in their student loan rates at about 2.75 percent, and those who’d been out of school a while could consolidate at about 3.3 percent. So many people took advantage of this deal, which expired July 1, that the lenders that were supposed to rework the loans couldn’t handle it. In other words, student loan lenders have been unable to consolidate all of the loans and they’re not hurrying to do so either. As a result, some companies are billing those former students at the current rates instead of the consolidated rates they were supposed to have after July 1. All the lenders have to do is ask the Department of Education for a waiver, according to the Dow Jones News Wires. The DOE is granting permission to give the cheap rate to anyone who submitted the application prior to June 30, but lenders don’t seem to care. And they’re not too focused on making sure people get switched over soon. You should not be stuck with a higher rate just because the bank hasn’t gotten around to giving you the correct rate.

If you are a college student or the parent of a student, listen up! You have the opportunity to get the same deal on your student loans as people who have graduated or are graduating this spring. Traditionally, within six months of graduation, students are able to fix the rate on their loans for up to 30 years. Right now, the available rate is about 2.8 percent. If you’ve graduated more than six months ago, you can lock in at about 3.4 percent. But what happens if you’re still in school? Up until now, it’s looked as though you were stuck with the current rate when you graduated. Rates are expected to go up to 5 percent after a few years, for example. But, the U.S. Department of Education has just decided to allow students in school to consolidate all of their qualified loans at the low rate. It’s going to be called “in-school” consolidation. The down side is that you have to start paying the loans right away. You can’t dilly dally on this. A number of people are going to want to do this, and it may not last, so act fast. It applies whether you are in or out of school. You can learn more about this at the U.S. Department of Education site, loanconsolidation.ed.gov. So get moving on this!

Today Clark talked with Ben Kaplan, recent college graduate who has thoroughly researched scholarships and fellowships and set up his own Web site. He did the research originally when he was applying to Harvard and his family was worried about the cost. But he’s turned it into a resource for high school and college students, as well as older people who are out of school but want to go back. His site is scholarshipcoach.com. It has tons of info about lots of other sites with information and is a tremendous resource.

We are at a point when student loan rates are the lowest they've ever been. Graduates have until July 1 to refinance or consolidate their loans into phenomenal rates. Unfortunately, there is an unpleasant side to student loans. Students used to never consider student loans as real obligations, and this forced the government to absorb billions of dollars of debt. To correct the problem, the government decided to give student loan collectors tremendous power. Now, student loan collectors are allowed to collect money from you without ever proving that you owe money. The Wall Street Journal reported that a current tactic of loan collectors is to look for terminally ill people who owe student loans. Terminally ill patients receive disability checks, which the student loan collectors are allowed to seize. They basically leave these people without any money before they die. About 40% of college graduates delay buying a home because of their student loans. An answer to student loans is attending junior or community college for your first two years. Sending your kids to a junior or community college first will cut down on their debt dramatically.

We are at a point when student loan rates are the lowest they've ever been. Graduates have until July 1 to refinance or consolidate their loans into phenomenal rates. Unfortunately, there is an unpleasant side to student loans. Students used to never consider student loans as real obligations, and this forced the government to absorb billions of dollars of debt. To correct the problem, the government decided to give student loan collectors tremendous power. Now, student loan collectors are allowed to collect money from you without ever proving that you owe money. The Wall Street Journal reported that a current tactic of loan collectors is to look for terminally ill people who owe student loans. Terminally ill patients receive disability checks, which the student loan collectors are allowed to seize. They basically leave these people without any money before they die. About 40% of college graduates delay buying a home because of their student loans. An answer to student loans is attending junior or community college for your first two years. Sending your kids to a junior or community college first will cut down on their debt dramatically.

There is a special student loan forgiveness program out there for people who want to become teachers. There are a few requirements and hoops to jump through, but the Taxpayer Protection Act will make some future teachers very happy if the President signs it into law. Congress has already passed the bill. Under the program, a teacher can erase up to $17,500 in student loan debt. Applicants have to teach specific courses, including math, science or special education. Applicants also have to be “highly qualified” and teach in less desirable school districts in order to be eligible. Many teachers may already meet all of those criteria and not even know it. The traditional amount of forgiveness was $5,000. Now it’s $17,000. So, that is a huge improvement. Learn about it here: ed.gov. The idea of wiping out student debt is not a fantasy anymore!