The worldwide credit crunch may have pushed some private lenders out of the student loans market - but mainly thanks to federal aid, the majority of undergraduates have secured financing for their education.

Mark Kantrowitz of finaid.org told the Washington Post that around 130 private lenders have pulled out of the student loans sector due to the current economic downturn.

Nevertheless, he estimated that 98% of students will not face any issues in securing financing for their degree, with the majority of lending coming from federal student aid.

Furthermore, the newspaper said colleges across the country including the University of Virginia, Georgetown, Catholic John Hopkins and Montgomery College, have reported no cases of individuals being unable to obtain study loans.

Indeed, some financial aid officers believe the move back towards federal loans could be a good thing for college finances, as they can offer more protection than private funding, such as deferments, more flexible payment schedules and fewer repayment penalties.

According to the Department of Education (DoE), forms of federal loans include grants, campus-based aid, Stafford - or Direct - loans and Plus loans, which can only be applied for by parents of students enrolled in eligible courses and schools.

Overall, the government distributes approximately $80 billion in financial aid to students each year.