Comments on: Student Loans Target Of Investigation

New York State Attorney General Says Colleges Are Taking Kickbacks From Loan Companies

[watkinpe]

I have spent over thirty years as a financial aid administrator. Regardless of institutional affiliation or competition, aid administrators have one goal in mind, to help students achieve an education. We are concerned about what is best for our students. Because a school's continuation in the federal aid programs is contingent upon the school's student loan default rate, we are held accountable for the billing and collection activities of the lenders. We look for lenders who will provide the best service in not only disbursing the loan but also during the repayment period. My Rich Uncle wants to be included as a preferred lender yet has never sent me any literature on their borrower benefits or on their loan servicing. I am disappointed with CBS. We are a dedicated group of professionals, who help students attend college. We work with limited federal funds.We do this because we believe in what we are doing will help individuals and our society. As Lyndon Johnson stated when he proposed a national goal of full educational opportunity. "Nothing matters more to our country, not our military preparedness not our productive economy not our democratic system, for freedom is fragile if citizens are ignorant.
Dr. Pat Watkins
St. Petersburg, Florida

[watkinpe]

I have spent over thirty years as a financial aid administrator. Regardless of institutional affiliation or competition, aid administrators have one goal in mind, to help students achieve an education. We are concerned about what is best for our students. Because a school's continuation in the federal aid programs is contingent upon the school's student loan default rate, we are held accountable for the billing and collection activities of the lenders. We look for lenders who will provide the best service in not only disbursing the loan but also during the repayment period. My Rich Uncle wants to be included as a preferred lender yet has never sent me any literature on their borrower benefits or on their loan servicing. I am disappointed with CBS. We are a dedicated group of professionals, who help students attend college. We work with limited federal funds.We do this because we believe in what we are doing will help individuals and our society. As Lyndon Johnson stated when he proposed a national goal of full educational opportunity. "Nothing matters more to our country, not our military preparedness not our productive economy not our democratic system, for freedom is fragile if citizens are ignorant.
Dr. Pat Watkins
St. Petersburg, Florida

[getovrit]

I was re-reading the posts and noticed one from someone who thought the program was failing. In fact, the FFEL program is probably the most successful gov't program in history. It has allowed millions of students -- mostly young people with no credit history, no job, no assets, and no skills -- to borrow the huge amount of money they need to go to college, and at very low interest rates. The interest rate on the FFELP loan, currently 6.8%, is about the same that prime customers are paying on a 30-yr mortgage that is secured by a house. Student loans are made on nothing more than the hope that educated students will get good jobs and pay the money back. Only the gov't can afford to make that bet, but its been a good bet. The progam costs the gov't and taxpayers virtually nothing (how about that, a gov't program that is self-funding!) because it is a bet on the people of this country, and that is always a good bet. The program won't be broken until individuals in Congress mess it up to further their own political agendas by providing half-truths, or out right lies. CBS should look into how much more the DLP costs students vs the FFELP, and why some members of Congress want to financially incent schools to use it.

[fadnyc]

Lies, lies, lies.

"The gift-giving has crept into the National Association of Student Financial Aid Administrators convention, according to Raza Khan, President of MyRichUncle..."

That's funny. I could have sworn I saw My Rich Uncle representatives giving out freebies at the conference in Seattle this past summer.

CBS ought to be ashamed. Larry Burt's name has been dragged through the mud because someone didn't feel like being bothered with facts. Can you say libel?

[wholestory]

I have been in financial aid for 11 years. I have been and am currently a student. I have borrowed and am borrowing again. I have seen both sides of the coin.

I can tell you that like all industries, there are a small percentage of people in financial aid and lending that are not ethical. However, the vast majority of the community work diligently to educate students on funding options for higher education.

There are hundreds of Federal Student Loan lenders. Financial Aid Administrators meet with many of them trying to find the ones that will offer their students the best service and repayment benefits. Lenders do their best through advisory boards, meetings with schools, students and parents to offer the benefits that students really want. We work as a team with the student in mind.

We realize that getting an education can be daunting and sifting through hundreds of lenders is extremely difficult. While any school out there will process a loan from any lender the student asks for, the preferred lender lists exist to make at least one portion of financial aid and higher education manageable.

The work of my undergraduate financial aid office is why I decided to get into financial aid. I ask that CBS work hard to get both sides of the story in the future before reporting on any story.

[wholestory]

I have been in financial aid for 11 years. I have been and am currently a student. I have borrowed and am borrowing again. I have seen both sides of the coin.

I can tell you that like all industries, there are a small percentage of people in financial aid and lending that are not ethical. However, the vast majority of the community work diligently to educate students on funding options for higher education.

There are hundreds of Federal Student Loan lenders. Financial Aid Administrators meet with many of them trying to find the ones that will offer their students the best service and repayment benefits. Lenders do their best through advisory boards, meetings with schools, students and parents to offer the benefits that students really want. We work as a team with the student in mind.

We realize that getting an education can be daunting and sifting through hundreds of lenders is extremely difficult. While any school out there will process a loan from any lender the student asks for, the preferred lender lists exist to make at least one portion of financial aid and higher education manageable.

The work of my undergraduate financial aid office is why I decided to get into financial aid. I ask that CBS work hard to get both sides of the story in the future before reporting on any story.

[muherdfan84]

After reading the various comments on this subject, I am totally amazed at the total lack of knowledge and misinformation. As someone stated, interest rates and ridiculous repayment amounts are due to the borrower not doing what they are supposed to do. By law, schools are required to do both entrance and exit counseling for all student loan borrowers. Student may attend but they pay little to no attention and then holler and scream that "No one ever told me" when a loan goes into default because they student didn't take the necessary steps to work with the lender. This applies to not only private lenders such as Sallie Mae, but also to the Direct Lending program, which is supposed to be the end all to save all. I have been employed as a financial aid administrator for over 20 years and can honestly say that I have never been offered a trip to Pebble Beach, Paris or even out of town! As for MyRichUncle, they are aware of the unethical procedures they use and intentionally by-pass aid administrations and go straight to students and parents because they know the aid officers are wise to their shady dealing while parents and student are not. I honestly thought that CBS was more professional and unbiased in their reporting. Appaarently that is not so.

[getovrit]

The comments so far can be divided into: 1) I borrowed a lot of money and 2) student lenders try to collect on the loan and don't just forgive it. Yes, in the real world, if you borrow money you should know what it costs and should plan on paying it back. You should also study hard and get the value out of it. The law does not allow lenders to forgive student loans, if it did, the costs for everyone else would have to go up -- think how much more a credit card or a mortgage costs; the additional cost pays for people who don't pay.
The real problem is that college costs a lot of money. It costs money, and you may have to borrow to pay it, but it is so much less expensive than the long term cost of NOT having a college education.
CBS should really investigate how much MORE the DLP program costs students and the gov't than the FFELP program, and why Sen. Kennedy is pushing it.

"Raza Khan, President of MyRichUncle, who complains his firm has been blackballed from preferred lender lists..."

I wonder why Financial Aid offices don't want to do business with a company who "sharply questions their integrity"? Would you want to do business with someone who insulted you and questioned your integrity?

There may be a few bad apples in the bunch, but don't let those few tarnish the exceptional and thankless work that many financial aid counselors offer to students.

[bara3d]

Every complaint that I%u2019ve seen about having someone having to pay $30,000 when they only borrowed $12,000 is because somewhere along the road to repayment, the person messed up. If you buy a house and then don%u2019t pay for it, the bank takes it away from you. How can a lender take away your education? Credit cards do the same thing. If you don%u2019t pay on time, you end up with late fees. These lenders have to pay people to spend 40 hours a week to contact delinquent borrowers, or there is a chance they will never get the money back. Late fees must be paid in order to run any kind of lending company.

Instead of trashing every student loan company in the world, why not focus our efforts on financial literacy. Students leaving high school need to be better educated about managing money and borrowing only what is necessary. I borrowed more than I needed and maxed out three credit cards by the end of my freshman year. It%u2019s taken five years to get my finances straightened out. But it wasn%u2019t Sallie Mae%u2019s fault that I had so much debt leaving college. I came from a Direct Lending school, Ted Kennedy%u2019s proposed solution for putting an end to the FFEL program. Guess what, Direct Lending is no different than any other student loan company. Except maybe that the government gets to keep all the profits.