Here's the entire article from yesterday's Wall Street Journal.
By EMILY GREEN, March 23, 2008
The best place to begin looking for good deals on private loans for college is still your college's list of preferred lenders.
To be sure, preferred-lender programs got a black eye last year: Financial-aid counselors at many colleges were found to have received financial incentives to direct students to particular lenders, regardless of their loan terms.
But that 2007 debacle caused many colleges to toughen their conflict-of-interest policies and review criteria for selecting lenders. "I don't deny that it was a nice wake-up call for the whole industry," says Dan Small, director of student financial assistance at George Washington University, which wasn't implicated in the scandal.
To win a spot on a college's list, a lender may offer students there lower-than-usual interest rates or fees. This happens particularly if the lender has had a good repayment experience with other students at that school.
Many colleges also weigh the quality of lenders' customer service to students when selecting lenders.
Finally, Mark Kantrowitz, creator of the student-aid Web site finaid.org, notes that there isn't a simple way to compare what you'd pay with various lenders. Many Web sites list lenders' best and worst rates. Those numbers "are completely irrelevant," Mr. Kantrowitz says, since borrowers' actual rates will depend on their credit ratings.
Subscribe to:
Post Comments (Atom)
1 comment:
It definitely came as a shock to everyone, both inside the industry and out, when this information came to light. The fact that financial aid officers have received incentives for their recommendations presents the most glaring conflict of interest imaginable in college admissions. I'm terrified by the fact that it went on for so long.
Post a Comment