Spring Break
Students Suffer Due To Corrupt Lenders
Our Opinion
Issue date: 8/31/07 Section: Commentary
Last week, the College Board, a non-profit organization that assists high school students with SAT and college preparation, quit the loan business. They based this decision on research conducted by Andrew M. Cuomo, Attorney General of New York, who investigated the actions of the $85 billion student loan industry. Through his research, he discovered that countless lenders pay colleges commission to promote their companies. This practice pushes students toward certain loan corporations if they are searching for loans through their school. Cuomo mainly focused on lenders that reimburse colleges for promoting their company. This does not only include paying colleges commission, but also paying the individuals that interact with the schools in cash or gifts. These giveaways are strictly unprofessional and Cuomo, rightly, is looking to end them.
Although lenders did not pay College Board a large commission, they offered them a small fee and also reimbursed educators and advisory members for travel and hotel accommodations for educational meetings. Cuomo states that College Board was not pressured into their decision but he believes that they made a wise choice in leaving the business. College Board will only process loans until Oct. 15. At that point, students will have to find another source for obtaining lenders and loan information. Unfortunately, College Board offered a generally unbiased list of lenders and granted $400 million in loans to 74,000 students in the last fiscal year. This upcoming absence leaves a wide financial and informational gap.
Because many colleges are still promoting certain loan companies, students cannot rely on their school's financial aid Web site as their only source for loan information. Because students are the ones that are going to be paying off loan debts one day, they need to be the most conscientious when choosing a lender. There are many common or popular lenders that are advertised by universities, but those aren't necessarily the right ones for everyone. Although loans are painstaking and frustrating, students need to take the time to research the options. There are loans out there with less interest than others, but finding them has become more difficult. With College Board leaving the business, there is regrettably no longer a simple Web site with a list of every lender, their policies, and their interest rates. While the decision of College Board highlights bias in the process, a once useful tool has been lost for students.
Although lenders did not pay College Board a large commission, they offered them a small fee and also reimbursed educators and advisory members for travel and hotel accommodations for educational meetings. Cuomo states that College Board was not pressured into their decision but he believes that they made a wise choice in leaving the business. College Board will only process loans until Oct. 15. At that point, students will have to find another source for obtaining lenders and loan information. Unfortunately, College Board offered a generally unbiased list of lenders and granted $400 million in loans to 74,000 students in the last fiscal year. This upcoming absence leaves a wide financial and informational gap.
Because many colleges are still promoting certain loan companies, students cannot rely on their school's financial aid Web site as their only source for loan information. Because students are the ones that are going to be paying off loan debts one day, they need to be the most conscientious when choosing a lender. There are many common or popular lenders that are advertised by universities, but those aren't necessarily the right ones for everyone. Although loans are painstaking and frustrating, students need to take the time to research the options. There are loans out there with less interest than others, but finding them has become more difficult. With College Board leaving the business, there is regrettably no longer a simple Web site with a list of every lender, their policies, and their interest rates. While the decision of College Board highlights bias in the process, a once useful tool has been lost for students.
Be the first to comment on this story