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I know we have a lot of high school seniors and college students here, some of whom have expressed concern about how to pay for college.
IMO and IME, loans can be a perfectly reasonable way to do that. Stafford (and when relevant, Perkins) loans preferably (and if you qualify, subsidized preferentially to unsubsidized), and including private loans when necessary. Which should only be when the amount needed is in excess of the maximum Stafford allowance, and even then get Stafford loans first, and private loans to cover the remainder. (I see students who just get a Teri loan to begin with, and it makes no sense to me at all.)
And there are many good companies you can get loans, both private and government-guaranteed, though.
However, one of the newest recently teamed up with the Princeton Review website to bewilder and confuse borrowers . . .
Now, they may be a reasonable resource for students, particularly for those who cannot find a co-signer. But for most students, an MRU loan will end up costing them more over the life of the loan than a traditional loan would – in some cases, much more.
And since it is clear from even a causal Googling that they make a practice of having their shills respond (in the guise of (oddly knowledgeable about MRU specifics) students, usually) to online articles objecting to their practices, I expect to see posts from one or two brand new Hatrackers shortly.
Anyone got a stopwatch? Posts: 32919 | Registered: Mar 2003
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They spend lots of money on advertising. Far more than other lenders, from what I understand -- including some other relative newcomers. May be part of why they're currently losing money.
Posts: 32919 | Registered: Mar 2003
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A little related advice to students planning on getting loans: start building your credit as early as possible. My fiancee recently got a student loan, and because she had limited credit history, the interest rate was very high.
Posts: 3950 | Registered: Mar 2006
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And to be clear, they are accusing financial aid officials of criminal activity -- kickbacks and payola are both quite illegal. And every FA person I know is very careful to steer clear of even the appearance of such impropriety.
Posts: 32919 | Registered: Mar 2003
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That slander does indeed appear very slanderous. Or is it libelous? I can never remember which is which.
In any case, where would I be without teh rivka? Completely unaware of this, that's where. Scandalous. Posts: 21182 | Registered: Sep 2004
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*curious* Is it an issue for y'all? That is, did you (or did you consider) taking out student loans?
Posts: 32919 | Registered: Mar 2003
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I've never heard of MRU -- but I'm STILL paying ole Sallie Mae every month for my years in academia. If my daughter needs loans, we will probably do the Stafford route.
quote:Originally posted by rivka: *curious* Is it an issue for y'all? That is, did you (or did you consider) taking out student loans?
Jeff has student loans, but not through MRU. Federal and Sallie Mae. And not for an abominable amount. Posts: 21182 | Registered: Sep 2004
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quote:Originally posted by Farmgirl: I've never heard of MRU -- but I'm STILL paying ole Sallie Mae every month for my years in academia. If my daughter needs loans, we will probably do the Stafford route.
FG
When I finished paying my student loans, I accidentally overpaid them by about four dollars. I was extremely tempted to never cash the check, because how many people have a check FROM Sallie Mae?
I ended up depositing it. The teller, a college student, was insanely jealous.
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quote:Originally posted by erosomniac: This is interesting enough to merit forwarding to people. Thanks, rivka.
Cool. I repeat my previous offer to answer questions about financial aid (to the best of my newly-trained ability).
quote:Originally posted by ketchupqueen: Jeff has student loans, but not through MRU. Federal and Sallie Mae. And not for an abominable amount.
Federal loans still have to be through a lender. Sallie Mae is a great company. And keeping student loan amounts down is an excellent thing!
quote:Originally posted by Farmgirl: I've never heard of MRU -- but I'm STILL paying ole Sallie Mae every month for my years in academia. If my daughter needs loans, we will probably do the Stafford route.
MRU is pretty new, and while they are advertising heavily, most of their advertising targets students, not parents. For the record, they do offer Stafford loans as well as private loans.
quote:Originally posted by erosomniac: When I finished paying my student loans, I accidentally overpaid them by about four dollars. I was extremely tempted to never cash the check, because how many people have a check FROM Sallie Mae?
So I shouldn't tell you how common that is? Posts: 32919 | Registered: Mar 2003
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I don't have any loans, and don't anticipate taking any out, but I do have a question which may be too institution-specific for you to have any idea, but...how likely do you think it is that I can get my four-year tuition waiver extended a bit if the reason I'm not graduating this year is due to medical issues? Should I even try?
Posts: 3546 | Registered: Jul 2002
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Yes, try. Also, have you applied for departmental scholarships? Those are often for upperclassmen. I had my fifth year of tuition paid for by the department.
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It's through ASU. And I have plenty of documentation--I'm already registered at the disability resource center, so they should have sufficient documentation.
Posts: 3546 | Registered: Jul 2002
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Good. If the waiver is through the school, they should have a fair bit of leeway. Contact the FA office. Sooner is probably better than later. Posts: 32919 | Registered: Mar 2003
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quote:Following Spitzer, who propelled himself into the governor's mansion by reining in Wall Street, is no easy task. But by choosing student lending as his first big target, Cuomo exposed pervasive conflicts of interest that have built momentum for reform. This month, revelations from his probe have resulted in the suspension of financial aid directors at six universities, three top executives at a student loan company and a senior Education Department official who oversaw the industry.
The most significant result of his investigation has been persuading three lenders, including Citibank and Reston-based Sallie Mae, to alter their business practices by signing a code of conduct that bars student loan companies from offering perks to university financial aid officials, sending company staff to work for free in financial aid offices or paying schools to steer students to their loans.
But some consumer advocates criticized the code for not going far enough and for letting giant lending companies resolve their role in the investigation with a $2 million settlement.
"For a behemoth like Sallie Mae, paying a $2 million settlement is not even a slap on the back of the hand," said Barmak Nassirian, associate executive director at the American Association of Collegiate Registrars and Admissions Officers.
Still, Cuomo has effectively created new national guidelines aimed at eliminating the often-hidden financial relationships between loan companies, universities and government officials. Cuomo and senior New York lawmakers unveiled a bill this week that would make the code law, which would make New York the first state to outlaw such practices.
The past month has been VERY busy on my financial aid listserv. I would cut and paste some of what was said, but I wouldn't do that without permission from each person, nor do I wish to go about GETTING individual permissions.
Is Cuomo making lots of accusations? Yup.
Are they based in fact? Primarily politically motivated and entirely blown out of proportion? Triggered by MRU (who most believe to be the unnamed "whistle-blower" mentioned by Cuomo's office)?
Are current practices generally problematic? Usually no, but a few of the approximate 20,000 FAOs (financial aid officers) nationwide crossed the line? Not at all problematic, but may give the appearance of impropriety?
I have colleagues emphatically stating each of the above positions, among others.
Regardless, I take issue with the tone of the article you linked to. Since when do we assume guilty until proven innocent? Accusations have been made, and various organizations are acting (on legal advice, one assumes) to prevent legal action. But whether any wrongdoing has actually been committed has not been proven -- either way. And Cuomo's continued insistence that wrongdoing is not only happening but is happening in most FA offices is both offensive and annoying.
His ignorance of the REASONS for such things as preferred lending lists, and the methods institutions use to make choices regarding them, also make me very suspicious of both his motives and his information.
Posts: 32919 | Registered: Mar 2003
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quote:Originally posted by Shigosei: I've seen a ton of ads for them around campus.
Shouldn't universities or maybe whole states have laws against usurious loan advertising and victimizing students? I think there should be a minimum standard in student loan terms which guarantees their fairness to students.
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There are minimum standards. And I certainly did NOT use the term "usurious" to describe MRU (or any other loan agency or guarantor). The "worst" private student loan (which don't have the interest rate caps that Stafford loans have) is still considerably cheaper than using a credit card, for example.
I just don't think they are, as they claim, a far better choice for most students than the more traditional lenders.
Posts: 32919 | Registered: Mar 2003
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One beautiful word: HOPE. The most wonderful (only?) advantage to a college education in Georgia.
Posts: 1945 | Registered: Jul 2005
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quote:Originally posted by rollainm: One beautiful word: HOPE. The most wonderful (only?) advantage to a college education in Georgia.
I wish I was a Georigia resident for HOPE. If I were in state I would totally qualify, but I'm not so I don't. The only way I can get it is if my parents move here or if I marry a Georgia resident.
Posts: 1547 | Registered: Jan 2004
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An intelligent governmental response (as opposed to Cuomo's grandstanding):
quote:Rep. Buck McKeon, ranking minority member of the House Education and Labor Committee, yesterday introduced H.R. 1994, the Financial Aid Accountability and Transparency Act of 2007. As described in a press release from his office, the bill is intended to protect students and prevent conflicts of interest between college lenders and financial aid officers. Below is a summary of the principal provisions of the bill.
Limitations on institutional recommended lenders
An institution of higher education may not recommend a lender of either Title IV or private loans unless it adopts a formal written policy concerning the procedures and criteria for the selection of recommended lenders and includes a minimum of three lenders for FFEL loans and private loans, respectively.
Disclosures
An institution must disclose on its website and in informational materials its policy, procedures, and criteria for selecting recommended lenders and the process by which they were adopted. The Secretary of Education is charged with developing model disclosure forms. For Federal student loans, the form must include certain prescribed information on the terms and conditions of loans provided by recommended lenders and, where the institution participates in the Direct Loan program, Direct Loans. For private loans, the model must include certain prescribed information and other information required by the Secretary.
In addition, all institutions that participate in the Title IV student loan programs or recommend private loan lenders must disclose (1) that students need not use recommended lenders and that the institution must process documents for loans from any lender; (2) all the information in the model disclosure form; (3) the maximum amount of grant and loan aid available; and (4) the institution’s cost of attendance. Direct Loan schools must disclose all but (1) above as well as the policies, procedures, and criteria used to decide to participate in the Direct Loan program.
Code of conduct
An institution that participates in a Title IV student loan program or has students who obtain private educational loans must adopt a code of conduct. The code must (1) bar most financial benefits from lenders or guaranty agencies to officers or employees of the institution involved in student financial aid that may present a real or apparent conflict of interest and (2) bar most compensation from lenders or their affiliates to those officers or employees for advising the lender or affiliate. Exceptions to these prohibitions are standard informational material, training, or informational material if it contributes to professional development, and favorable terms on loans to students or parents of students employed by the institution.
No “educational loan arrangements”
An institution may not enter into an arrangement with a lender under which the lender makes loans to the institution’s students or their parents, the institution recommends the lender, and the lender pays a fee or other material benefits to the institution or its officers, employees, or agents.
Limitation on staffing assistance
An institution may not request or accept assistance from a lender in staffing a call center or financial aid office except as related to professional development training for financial aid administrators and providing certain materials to borrowers.
Private lender disclosures
The Truth in Lending Act is amended to require that private loan lenders disclose to prospective borrowers, and obtain a written acknowledgement of receipt from them, (1) that they may qualify for Title IV assistance; (2) that Title IV loans may have more beneficial terms and conditions; and (3) that the prospective borrower may obtain more information on the Department of Education’s web site.
Another idiot on the Hill who hasn't done any research Restrictions and rules on preferred lender lists are one thing. Forbidding them entirely is baby-with-the-bathwater time. (And the rising cost of college is certainly a problem. But lender lists have nothing to do with it.)
No lender lists means students with no idea of where to start with the more than 300 different lenders available. Means that FAAs (financial aid administrators) are not allowed to use their experience with companies to guide students toward ones which have a known track record.
Students have always had the right to choose lenders not on the school's list. The lists are suggestions only. (And on average, 10% of students will choose a lender not on their school's list.) But most FAAs believe this will hurt students, not help them. My school doesn't even have a preferred lender list, and I think this is ridiculous.
Edit: Hmm. Looks like that blog doesn't have his whole statement re the bill. Here we go:
quote: Key provisions include:
Establishing a Code of Conduct for institutions of higher education that prohibits colleges and their employees from receiving anything of value from any lender in exchange for advantages sought by the lender;
Prohibiting institutes of higher education from designating "preferred lenders;"
Requiring colleges to provide students and parents with a guide that enables them to do their own evaluation of the loan products, benefits, and services offered by the lenders;
Requiring an annual attestation of college compliance by a high level college official with the Code of Conduct;
Expanding prohibitions on guaranty agencies and lenders, including provisions that prohibit the offering of any premiums, payments, prizes, and tuition payments;
Prohibiting both lenders and guaranty agencies from sending unsolicited electronic mailings to potential borrowers; and,
Phasing out the ability of colleges to act as lenders in the Federal Family Education Loan program, a provision commonly referred to as "school-as-lender."
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If my daughter needs loans, we will probably do the Stafford route.![[Razz]](tongue.gif)
