Despite the economic downturn and instability of the credit markets, college students are acquiring college loans, although the qualifying criterion has become more stringent, financial aid officials say.

Earlier this year, pundits worried the volatility of financial markets could disrupt loan access for an estimated 6.7 million students expecting to apply for federal loans as scores of student-loan providers pulled out of the government-subsidized loan program.

With congressional intervention, a federal loan fallout was avoided, says

Robert Shireman, president of the Institute for College Access & Success and executive director of the Project on Student Debt.

“Congress has done a good job of making sure that those loans are flowing with the minimum of interruptions, even during this credit mess. Congress made the student loan program an entitlement. Everyone who qualifies gets a loan, even if more people want loans than the government expected,” Shireman says.

The vast majority of student borrowers, nationally, use student loans such as Perkins and Stafford loans backed by the federal government. These loans come with competitive interest rates and low borrowing limits. A first-year undergraduate student can borrow $5,000. Juniors and seniors are allowed $7,500.

To cover additional costs, students resort to costlier private loans. More than 30 lenders have dropped out of private college loan lending, including banks such as Bank of America, Washington Mutual and Nelnet, one of the nation’s largest loan consolidators. With fewer players in the game, the rules are changing.

Private lenders are charging higher interest rates, demanding higher credit scores and insisting on more cosigners. Traditionally, a student could get a private loan with a credit score of about 620. Now anything under 650 is considered subprime, according to FinAid.org, an aid resource organization.