Getting Advice

Getting Advice

In the wake of all the negative attention to financial aid offices in 2007, students might well be nervous about relying on advice they get from their colleges or about borrowing from a company on a college's list of "preferred" or "recommended" lenders.
While it is certainly the case that in 2007 investigators for Congress and various state attorneys general uncovered questionable relationships between lenders and both colleges and individual financial aid administrators, students should still start with their financial aid offices. More coverage of the tangled arrangements some colleges had with lenders is available here, here and here. Many of these arrangements have since ended.
But students should learn from the financial aid scandals and should ask, for example, how recommended lenders were selected and what are the terms of the loans those lenders offer? Under the terms of an agreement with the New York attorney general's office, more and more lenders are required to tell colleges exactly how much students are paying in interest.
For more information, there are plenty of Web sites out there aimed at future college students. Some sites even can help compare loan terms from different lenders to help students choose the best deal, like SimpleTuition and Graduate Leverage. For a comparison of the sites, you can check Finaid's Web page. But some sites are in fact owned by lenders or other companies, or – like SimpleTuition - they are paid referral fees by lenders, so students should not rely on any one source of information.
Some helpful sites are maintained by both nonprofits and for-profit organizations not directly in the student loan business. Those seeking to learn more may want to check out The Institute for College Access and Success (www.ticas.org). The nonprofit's Project on Student Debt provides tips on shopping for and comparing different student loans.
Most of the information provided discussed above is included in the Education Department's Guide to Federal Student Aid [PDF].
After reading this far, you might feel like as much work is involved in paying for school as getting through it. But remember: a little effort now could pay off in savings for years and years after graduation.