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04.30.07 | Stafford Loan Eligibility

Posted in FAFSA, Financial Aid, Stafford Loan by David Bonvie

At the Student Loan Network we have been receiving a ton of phone calls from parents and students. Basically, the majority of the calls are confused potential borrowers who are trying to figure out what makes someone eligible for the Stafford Loan.

The requirements are the following:
-Enrollment at least half-time as determined by the school
-U.S. Citizen or permanent resident or eligible residential status
-Satisfactory academic progress as determined by the school
-Not in default on any federal education loans
-Have filed a 2007 FAFSA
Stafford loans are the most popular federal loans available to help students pay for college. These loans have low interest rates and do not require credit checks or co-signers. Also, the Stafford loans provide a variety of deferment options and extended repayment terms for borrowers who need more time to repay their loans. They are available to both undergraduate and graduate students and can be used to cover eligible expenses such as tuition and fees, room and board, books and supplies and a living allowance.

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

04.27.07 | Women, 95 to be Oldest College Graduate

Posted in College Grads by David Bonvie

When 95-year-old Nola Ochs graduates next month from Fort Hayes State University, she will be the world’s oldest college graduate. The record Mrs. Ochs will break, according to Guinness World Records, belongs to Mozelle Richardson, who at age 90 in 2004 received a journalism degree from the University of Oklahoma. Mrs.Ochs says she’s more excited about getting her degree, than getting a world’s record! Congratulations Mrs. Nola Ochs!

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

04.26.07 | A Good Time To Consolidate

Posted in Consolidation, debt management by Kristin Morris

With graduation time right around the corner, we’ve had a lot of customers call in asking when to consolidate their federal student loans.
First of all, federal guidelines stipulate that you can not consolidate you loans while enrolled in school more then half time. However, that doesn’t mean you have to wait until you graduate to start the process. We recommend getting in touch with a consolidation lender before you graduate. This will afford you the time to get some of your questions answered, a quote for your lower monthly payment, and information about borrower benefits. While the application can not be signed and dated until AFTER you graduate, it doesn’t hurt to do your homework and get prepared now, ahead of time. What’s the rush you ask? Interest rates are expected to increase again on July 1, 2007 – so having your application signed and submitted after you graduate and before the rate increase will most likely be a tight squeeze. Additionally, because of the influx of student loan borrowers submitting applications this spring, processing times will be inevitably delayed.
As an added benefit, if you consolidate your loans during your grace period (6 month none payment period post graduation) you can lock in your interest rate .6% lower then if you wait until your loans go into repayment. Doing so does not require that you start making payments right away. Upon applying, you can request to have your application held for your grace period end date. Your application will have been signed and submitted long before your grace period ends, but your new consolidation lender will not start billing you until that date is reached.
Stay tuned over the next few weeks for more helpful information about the interest rate change this coming July. As always, your comments and suggestions are appreciated.

04.25.07 | Stafford Loan Interest Rates

Posted in Consolidation, Interest Rates by Kristin Morris

The federal government determines the interest rates for the Stafford Loan program. The rate is determined from when the loan is originated. Please see below for current interest rates for the Stafford loan

Stafford loans disbursed before July 1, 1998 have a variable interest rate that resets every July.

Stafford loans disbursed between July 1, 1998 and June 30, 2006 have a variable interest rate that resets every July.


Stafford loans
disbursed on or after July 1, 2006 have a fixed interest rate of 6.8%

If you have questions about what your interest rate would be if you consolidated your Stafford Loans into a fixed interest rate loan please contact a Student Loan Network Advisors. We can research your loan history and estimate your consolidation interest rate for you.
The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

04.25.07 | Don’t lie on your Admissions!

Posted in Student Loan Industry News by David Bonvie

It is always better to tell the truth as exibited in the article below.

Admissions Police Bolster Efforts to Uncover Fraud

by Jon Weinbach
CollegeJournal.com

CollegeJournal.com

Before mailing out acceptance and rejection letters over the past week, thousands of colleges and graduate schools conducted their usual reviews of test scores, transcripts, and essays. But less publicly, admissions officers focused on something else: police databases, plagiarism checks, and reports by private-investigators.

There’s a new age of vigilance in academia. Spooked by incidents including guidance-counselor fraud in Los Angeles, blatant plagiarism at MIT and campus crime in North Carolina, colleges and graduate schools are shoring up their admissions process. In an era when applicants seek an edge with $500-an-hour “admissions consultants” and online essay-editing services, schools are using their own new methods to vet prospective students. Much like corporations that have been burned by CEO résumé scandals, universities are tapping into the burgeoning background-check industry to verify what’s written–or not–on applications.

The University of California system, which enrolls more than 30,000 college freshmen each year, now conducts random spot checks, asking about 10 percent of applicants to verify activities, grades, or facts from personal essays. Last year, five Division I athletic programs began using a law firm to conduct background checks on high-school recruits. And this school year, Harvard’s undergraduate admissions staff added a former professional background checker. “We look at essays with a certain degree of skepticism,” says Harvard College director of admissions Marlyn McGrath Lewis. “We’re not shy about checking further.”

An honor code

No organization tracks admissions transgression, and university officials say most applicants are honest. But finding the exceptions has become harder as the number of college applications has grown. The Education Department projects 3.2 million Americans will graduate from high school this spring, up from 2.6 million a decade earlier. Record numbers of applications were reported this year, from the Ivy League (including Harvard and Dartmouth) to the Big 10 (Northwestern) and Pac-10 (Stanford). “You can’t verify whether they put two or three years into the chess club,” says Richard Shaw, Stanford’s dean of admissions. “To a great extent, it’s an honor code.”

But threats to that code often start in high school. According to a 2006 survey of 36,000 high-schoolers by the Josephson Institute of Ethics in Los Angeles, 60 percent of students admit to cheating on tests, and more than 30 percent say that within the last year, they’ve copied a document from the Internet. Students are “far more brazen” today, says Michael Josephson, a former law professor who founded the institute 20 years ago. Schools at all levels, he believes, have become soft on cheating: He cites a desire to give students a second chance, a reluctance to commit resources to cracking down, and the fear of crossing parents who direct anger at schools, rather than at kids, when improprieties are brought to light. “What you allow, you encourage,” he says.

Last year at Campbell Hall, a 63-year-old Episcopal school in North Hollywood, California, longtime college counselor Vince Garcia was fired for putting false information on student recommendations. Mr. Garcia, who was well regarded by colleagues at other private schools, cited awards students hadn’t won and quoted teacher comments that were false or copied from other recommendations, says the Rev. Julian Bull, Campbell Hall’s headmaster.

The school subsequently rewrote recommendations for 55 students and notified colleges that had received the forms. None of the admissions decisions were changed. Mr. Garcia declined to comment on the episode or Campbell Hall’s actions but says he remains “committed to working with students to find the best path–for them–into higher education.” Mr. Garcia is now an admissions officer at California Lutheran University in Thousand Oaks; Matthew Ward, the school’s dean of undergraduate enrollment, says the school is confident Mr. Garcia has “the appropriate level of accountability to be an asset to the team.”

‘We’ve seen it all’

Business schools have taken the lead in cracking down. After a couple of cases of B-school admissions fraud, corporate security firm Kroll started a Global Academic Verifications division in 2003. Kroll now does résumé checks on accepted students for about 20 business schools, including Wharton and Columbia. “Fake degrees, grade inflation, employment titles, or dates that aren’t true–we’ve seen it all,” says Kroll’s Brian Lapidus, who oversees the division. Medical schools have also raised their guard. Last June, the Association of American Medical Colleges asked all of its members to include criminal background checks in their admissions processes.

Admissions officers say they have ways to identify heavy-handed parental editing, embellishments, and outright lies. Tainted applications can be easy to spot because they lack “internal validity”–a polished essay may raise eyebrows, for example, coming from a student with mediocre English grades. A simple Internet search can be used to spot-check athletic activities or scholastic honors. The latest innovation: downloadable SAT writing samples. Since the standardized test added a written component two years ago, colleges have been able to compare students’ writing proficiency on their SAT essays–more or less guaranteed to be their own work–with the prose that accompanies their applications.

The pressure to create a memorable application is growing as admissions brochures trumpet the importance of factors such as leadership, writing ability, and out-of-school activities. As a result, colleges have helped fan the perception that exotic pursuits and flawless essays are more important than ever. Lloyd Petersen, a former director of admissions at Yale and Vassar, says the crush of applications “forces people to do things that they wouldn’t normally do.”

Modeling experience

Filling out applications, Charlie Covey mentioned his nascent modeling career. The high school senior in Roswell, Georgia, says he signed with a modeling agency in Atlanta last fall, though he hasn’t yet booked a job. On the advice of a private college counselor, he added the agency to the applications’ “work experience” section. “I’ve done headshots,” says the 18-year-old, who has been accepted to the University of Georgia, University of Southern California, and New York University. “I felt kind of bad because I didn’t have tons of stuff like a lot of my friends.”

Last year, Sonia Minden’s heart fluttered when she received a solemn letter from the University of California undergraduate admissions staff. The note asked her to verify the experience she wrote about in her application essay–an archaeological dig in Switzerland led by a Stanford professor. Ms. Minden, who had a 3.8 GPA and edited the literary magazine at Capuchino High School in San Bruno, California, says she thought the letter was tantamount to a rejection. It also raised suspicions among her friends. “They were like, ‘did you lie?’” she says.

Ms. Minden, it turns out, was among some 7,000 applicants the UC schools randomly picked for its authentication program. The students are instructed to submit material to confirm details in one of seven application categories, such as volunteer history and personal statements. Though the program started in 2003, there’s barely a mention of it on the UC application. (One sentence in the instructions notes that students may receive a “request for further information.”) Susan Wilbur, the UC director of undergraduate admissions, says the point is to “send a message that we’re committed to the highest degree of integrity.”

Ms. Minden says the certification process was disconcerting mostly because she didn’t see it coming. “It was kind of a stressful time,” she says. The professor who led the dig wrote a letter on Ms. Minden’s behalf, and now she is a freshman at her first-choice school, UC-San Diego.

Some transgressions are clear. A few years ago, the Massachusetts Institute of Technology asked applicants to come up with their own essay question. Two picked an identical topic: “What if Superman had sex with Lois Lane?” Both students excerpted material from “Man of Steel, Woman of Kleenex,” an essay by author Larry Niven. Both were rejected. Marilee Jones, MIT’s dean of admissions, calls the episode “hilarious,” but worries that colleges have helped ratchet up the pressure of applications. In an effort to discourage puffery, she reduced the number of lines MIT’s form gave students to list extracurricular activities. “Kids felt like they needed to fill up all of them,” she says.

For all the steps colleges are taking to safeguard admissions, they’re also eager to boost applications–which in turn increases their “selectivity” rate, an important factor in school rankings. Some colleges fear that aggressive screening could scare off potential students, says John Barrie, chief executive of Turnitin.com, a Web site that high schools and colleges use to check papers for plagiarism.

The nine-year-old site, which screens more than 100,000 student papers a day, added an admissions-essay service in 2004. Over the last three years, Mr. Barrie says, the site has screened more than 27,000 admissions essays, and found 11 percent included at least one-quarter unoriginal material. Mr. Barrie says about two dozen schools now use the site to check admissions essays; none of the institutions would agree to be identified.

Universities are only the latest institutions to scrutinize candidates. The background-check industry has mushroomed since the Sept. 11, 2001, attacks, as criminal and résumé checks have been added to the hiring process of the likes of Starbucks (it plans to check aspiring baristas) and Wal-Mart Stores. The National Association of Professional Background Screeners, founded four years ago, now counts more than 400 members; in the early ’90s, there were only about 30 players in the business, says the trade group’s cochair, Robert Capwell.

The growing number of Web sites devoted to the admissions industry has made it easier for students to plagiarize material and trade in misleading gossip. Ivyessays.com, a professional essay-editing service, also lets students buy packages of sample essays grouped by theme, question, or school. The $12 “Harvard” package includes 10 essays and five short-answer samples tailored to the school’s application. (Ivyessay.com’s writing is meant to be used as a sample, says editor in chief Adrienne Dowhan.) On chat boards like collegeconfidential.com, topics range from “How to impress admissions committees with your extracurriculars” to “Should I tell them that I’m Jewish?”

Telltale cell number

Bari Norman, an independent college counselor based in New York and Miami, says she occasionally sees parents tacitly encourage their children to stretch the truth on applications. The most troubling cases, she says, involve students who feel they’re at a disadvantage because they’re not lying. Last year, a white client in Miami was distraught because her friends were falsely identifying themselves as Hispanic. “She asked me, with a straight face, ‘Why can’t I do that?’ ” says Ms. Norman, a former admissions officer at Barnard College.

Admissions officials at the Haas School of Business at UC-Berkeley saw the desperation firsthand. In 2003, admissions director Jeff Pihakis tried to call an applicant to tell her she had gained admission. After several failed attempts, he reached a woman who gave him a cellphone number for the applicant. Looking again at the file, he saw the number he’d just been given matched the number the applicant had listed for a purported boss. That led Mr. Pihakis to uncover other fabrications, including false job titles and fake stationery for the sham company. The admissions staff ultimately investigated all 100 of the students it had admitted, uncovering four more applicants who had misrepresented themselves.

The next summer, Kroll approached the school about providing background checks. Since then, all accepted students have had to pass an “employment and background verification”–and pay a $65 fee–before enrolling. In the past four years, only one has been rejected. “We were hoping it would be a deterrent,” says Mr. Pihakis. “And it has been.”

04.25.07 | Taxes Done? Fill out your FAFSA!

Posted in FAFSA by David Bonvie

Now that the tax deadline has come and gone most of you should be ready to start filling out your FAFSA’s for the 07/08 school year. This is a perfect time to get a head start on financing your college education. The sooner you fill out your FAFSA the better chance you have on receiving loans and grants. Some of you may think that you have a lot of time but the truth is the Deadline is only a month away. The deadline for the 07/08 school year is July 1, 2007 so get moving!

For more information and to fill out an application visit FAFSA Online.

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04.24.07 | Three Colleges Agree to Change Lender Policies

Posted in Student Loan Industry News by David Bonvie

Three colleges agreed Monday to change how they recommend lenders on campus. This includes Washington University in St. Louis, Oakbrook Terrace, Illinois-based DeVry University, and Career Education Corp. agreed to a code of conduct to protect students from kickbacks paid to colleges by lenders in exchange for steering students their way.

Under the code schools are now obligated to end all revenue sharing agreements with lenders and provide full disclosure of ties to loan companies.
For more information on this article please click here

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

04.23.07 | I got my award letter…now what?

Posted in Uncategorized by David Bonvie

As award letters are starting to be mailed to graduate students, it means that now is the time to plan for the fall semester and the earlier you plan, the better off you’ll be.
First, look at the award letter – if this is your first year or if you have applied to many schools, the award letter might be your deciding factor in choosing a school.
You’ll want to look at the overall cost of attendance, what you will be paying “out of pocket” (from your savings, family contributions, etc.), and the aid that you have been offered from the school.

Once you have the award letter, if you have been granted Stafford loan funds, you most definitely should apply for it. The Stafford loan is a low, fixed interest rate loan, in which the government often subsidizes the interest payments while you are enrolled in school. Gradates may borrow up to $18,500/year but it is based mainly on what you have been awarded.

If you’ve been awarded university grants, take those – grants are free money that you don’t have to repay. You may be awarded work-study – this is up to you on whether or not you take this award.

To bridge the rest of the gap, there are few final options.
1) Graduate PLUS Loan – Just became available on July 2006 for Graduate students to borrow up to the cost of education minus any aid you receive (Stafford, university grants). This is a fixed interest rate loan that’s Federally backed.
2) Private student loan – This also allows you to borrow up to the cost of education to cover tuition, books, room and board, fees, and transportation. The funds get sent directly to you so you can use them as you need throughout the year for any education related expense.
3) Scholarships – This is a great, free solution to finding a wealth of funds available for school. Scholarships do not have to be repaid but you have to do a bit of homework to find them. The work put in is worth it, though, when you don’t get a bill for this after you graduate.

04.20.07 | Student Loans: Don’t Get Burned

Posted in Student Loan Industry News by David Bonvie

Listed below is a great article from cnnmoney.com on how financial aid officers don’t always act in the student’s best interests and how a student can protect themselves.

NEW YORK (Money) — For students who plan to borrow for college, choosing a
lender has become a lot more complicated.

In March a scandal erupted when New York State Attorney General Andrew Cuomo launched an investigation into allegations that student loan companies provided kickbacks to university financial aid officers and staffers in order to win more business.

One key goal was to gain a spot on so-called preferred lender lists – the companies specifically recommended by financial aid officers, which tend to be chosen by most students. Attorneys General in California, Connecticut and other states have launched similar investigations.

Cuomo has already won multi-million-dollar settlements from several loan companies, including Citi and Sallie Mae, the nation’s largest student lender. (Sallie Mae (Charts), whose stock price has plunged, recently agreed to a $25 billion buyout by two private equity firms along with two banks.) Several colleges and universities, including the State University of New York, New York University and the University of Pennsylvania, have also agreed to settlements.

Do these disturbing headlines mean that students and parents should avoid borrowing from lenders on the colleges’ preferred lists?

Not at all. Most colleges vet lenders closely to make sure that their terms are attractive and that they offer good service, said Kal Chany of Campus Consultants, an independent financial aid consultant in New York City. Still, Chany says, “You should consider the lending list only as a starting point.”

Fact is, as the scandals have shown, it’s important to shop around, since you may well find a better deal elsewhere. Remember, you are allowed to borrow from any loan company you choose – not just those recommended by the school.

Here are three key points to consider:

Understand why your college is recommending particular lenders. And if it’s not clear, ask your financial aid office. “One benefit of the investigation is that college and universities are making an effort toward greater disclosure,” says Mark Kantrowitz, publisher of finaid.com, a financial aid information Web site. (Citibank is an exclusive advertiser on the Web site.).

Some colleges may recommend a loan company because it offers great customer service, for example, and not because it offers lowest possible rates.

Look for up-front discounts. At many colleges, lenders have agreed to waive so-called origination fees on Stafford student loans, the main federal loan for students, which run 3 percent of the loan amount.

Scrutinize repayment rules. Many lenders will offer to reduce their rates by 1 percent to 3 percent – the current interest rate on Stafford loans is 6.8 percent. But check to see what strings may be attached.

For example, some lenders may simply guarantee a reduced rate once you start repaying, while many others require that you sign up for an automatic repayment plan and maintain an on-time payment record for anywhere from 12 to 36 months.

For parents taking out PLUS loans, lenders may also reduce rates for on-time payment. Many will also permit interest-only payments if you run into financial trouble.

“Be sure you understand the conditions of these repayment breaks,” says Patrick McTee, financial aid director at the University of Denver. “If you have trouble keeping up with your bills, you are better off choosing a lender guarantees to reduce the rate by 1 percent, then one that will give you 2 percent off but only if you never miss a payment.”

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

04.20.07 | After the FAFSA, school starts and then what?

Posted in FAFSA by David Bonvie

Alright so you finally get your FAFSA in order…your school sends you your Financial Aid Award letter. Here is a sample Award letter…remember this only comes from the school if you filled out your FAFSA

UNIVERSITY OF LEARNING
FINANCIAL AID AWARD LETTER
2003-2004

Date: 1/21/04
ID#: 000000009

Award Information

Your awards are based on the information you reported on your Free Application for Federal Student Aid. Your eligibility for these awards may change if new information is received, including information we may receive with regard to your Satisfactory Academic Progress. The University of Learning reserves the right to adjust your awards.

Please read the Award Letter Guide, enclosed with your initial Award Letter. The Guide explains how to complete the financial aid process. Award information, the Guide, and terms and conditions for receiving aid at the University of Learning are online. You are responsible for understanding these terms and eligibility requirements.

Awards

We are pleased to offer the following assistance for the 2003-2004 academic year.

  Fall Spring Summer Total
Federal Pell Grant $1,150 $1,150 $0 $2,300
Federal Perkins Loan $1,000 $1,750 $0 $2,750
Federal Work Study Program $1,000 $1,000 $0 $2,000
University of Learning Assistance Grant $2,000 $2,000 $0 $4,000
University of Learning Assistance Grant $0 $1,000 $0 $1,000
Direct Loan Subsidized $1,313 $2,187 $0 $3,500
DC Tuition Assistance Grant Program $3,257 $3,257 $0 $6,514
Other External Aid $750 $750 $0 $1,500
Total: $10,470 $13,094 $0 $23,564
 
Term Bill Credit $5,444 $8,055 $0 $13,499
(see Award Letter Guide)

What To Do Next:

  • Verify that accurate assumptions have been used to determine your awards.
  • Carefully review and follow the instructions on the Data Changes Form.
  • To reduce or decline all or part of your loans, you must complete and return the Data Change Form.
  • We will assume you fully accept the awards above unless you submit changes to us immediately.
  • Return corrections and required documents promptly.
  • Retain this letter for your records.

Now here is the tricky part. Once you accept the Financial Aid Award letter…you will need to fill out some additional paperwork in order to complete the loan process. Keep in mind that Stafford Loan is just the name of the loan, it is not a company…colleges have “preferred lenders” they use to lend them the Stafford Loan…these are the companies you will be paying back after you have finished school. Now the preferred lenders have been in the news a lot lately…because it is being investigated that schools have inappropriate relationships with the companies that are listed on their preferred lender list. In some cases it has been proven that student loan companies have offered favors and trips to school officials in order to get their company on that schools list. Here is an article from The Courier News, http://www.couriernewsonline.com/:

    Experts offer advice about student loans
    April 20, 2007
    By Erin Calandriello STAFF WRITER
    ELGIN — In the last two months, big student loan providers like SLM Corp., commonly known as Sallie Mae, have been under the microscope over under-the-table deals to benefit schools and lenders at the expense of students.

    Just last week, Sally Mae, the nation’s largest student lender, dished out $2 million and agreed to modify its business practices as part of a broad probe of the student loan industry by New York Attorney General Andrew Cuomo.

    Much of his focus is on “preferred lender” lists offered by college financial aid offices.

    Cuomo’s team discovered preferred lenders that have provided all-expense-paid trips to exotic locations for college financial aid officers who then directed students to the lenders.

    Cuomo has established a new code of conduct, which prohibits revenue sharing between lenders and schools, mandates disclosure of relationships between colleges and lenders, sets restrictions on how lenders are chosen for preferred lender lists, and bans gifts or trips to university employees from lenders.

    Sallie Mae, based in Reston, Va., which has relationships with more than 5,600 schools, agreed to stop running call centers or providing additional staff for college financial aid offices.

    It also will stop paying financial aid officers who serve on advisory boards and no longer will fund trips for school officials.

    So far, six schools — the University of Pennsylvania, New York University, Syracuse University, Fordham University, Long Island University and St. John’s University — have agreed to reimburse students a total of $3.27 million for inflated loan prices caused by revenue sharing agreements, according to the New York Attorney General’s Office.

    Issue hits close to home

    Closer to home, Western Illinois University received thousands of dollars in kickbacks from student loans, officials said recently in response to a Freedom of Information Act request by the Sun-Times News Group. The arrangement — similar to ones under scrutiny in New York — ended in cash for the school whenever a student agreed to take a loan from preferred lender Nelnet. Of the $8 million in private loans made since the contract began last July, $1.8 million went to Nelnet.

    Students at WIU were unaware that a small percentage of their loans — 0.5 percent — was being funneled back to the school.

    In response to Sun-Times inquiries, the state’s 11 other public universities said neither their schools nor any officials received anything in exchange for including a lender on a preferred-lender list or for directing business to a lender.

    However, in light of the loan scandal, colleges throughout the state spewed out advice to students on the loan process. Suggestions ranged from sticking with big-name lenders to staying with direct loans from the federal government to consolidating loans within six-months of graduation.

    At University of Illinois in Urbana-Champaign, Victor Martinez, the associate director of financial aid, said direct lenders are the way to go. He said most colleges use direct lenders to prevent students from being ripped off.

    “We have a direct lender,” meaning students at UIUC get their money directly from the U.S. Department of Education. The federal government pays students’ loans throughout their four years of college without going through a middleman such as Citibank or Sallie Mae.

    “It’s a lot faster and we can provide better services to the students,” said Martinez. “It’s been the best one from the beginning.”

    Elgin Community College’s financial aid director, John Fountain, agreed. He said direct lenders cut through the forest of loan hoopla. Fountain said about 18 percent of students at ECC use some type of financial aid.

    “Direct lenders are more efficient,” said Fountain, adding ECC only uses direct lenders. “It seems intuitive. If you have one place you’re going through to do all of the paperwork, you know exactly how to get the information. Direct lenders cost the student less than going to a bank.”

    The Associated Press and the Sun-Times New Group contributed to this story.

    Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

What does all this mean? What students do not realize is that if you attend a school that does participates in the FFELP Stafford Loan lending program, the student, by law has the right to choose WHO their lender will be; regardless of who is on the school’s preferred lender list. The colleges do not tell the students this, so it is not widely known…and I have seen first hand that schools will make it almost impossible for a Stafford Loan to be approved if the student applies with a company that the school is not used to working with. However, it can be done. The reason schools make it difficult for students is because they have “relationships” with their lenders, and they are not supposed to “let” their students get Stafford Loan from other lenders. Now all of this would not be an issue if all the FFELP lenders practiced the same policy for all Stafford Loan…if it truly were a level playing field, it wouldn’t make a difference right? Although the above article states that Direct lending schools are perhaps a better way to go…I do not agree entirely with this. If you have a direct loan and have experienced their customer service, then you know why I feel this way. It believe that it is more difficult for a student to begin repaying their loans back to Direct when they graduate because their customer service for loans that are in repayment is very difficult to work with. Their rigidness often sets students off, and they feel they have no where else to turn to get simple questions answered before they begin repaying their loans. My point with this blog is to let students know that they have rights they are not aware of. They have choices their schools do not convey to them. Do your research on your schools preferred lenders…if you don’t like what you find, go elsewhere…this is money YOU will be repaying…not your school. Do not depend too much on the officials at your school. As noted above, their # 1 priority is not always the student.


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