A report detailing nefarious practices in the student loan industry was released June 14, 2007 by Senator Edward M. Kennedy (D-MA), chairman of the Health, Education, Labor and Pension Committee. For parents and students, the revelations are both telling and disturbing, as they are currently navigating through an industry where over $60 billion will be borrowed in federal student loans.
MyRichUncle sends the following letter to students and parents nationwide to remind them they have the right to choose and secure student loans that carry the best rates and benefits, regardless of the preference of the financial aid office to work with a specific lender or lenders.
Dear Parents and Students,
The newest revelations in the student loan industry detail scandal, poor judgment and even blatant disregard for common sense, to say the least. Regardless of it being lenders enticing financial aid offices with gifts, or financial aid offices persuading lenders to entice them, the result is the same: there is no focus on what is meaningful to borrowers who needs to take on a loan to pay for their education.
At MyRichUncle, we have long been running a campaign to reform student lending. Needless to say, the two communities that were displeased with us were financial aid officers and other lenders, while consumers like you welcomed the information we brought to them. We suggested to students and parents that it would be a good idea to ask questions of the financial aid office - questions like:
-- Can you guarantee me the lowest rates and fees, and the best benefits?
-- What was your lender selection process?
-- Do you accept inducements from any lenders on your lender list?
The transparency that could have been afforded to students and parents, should any financial aid officer have consented to answering the questions, would have been invaluable in securing a better student loan product, whether that lender was "preferred" by the financial aid office or not.
By this time, you may have received a financial aid package from your school. In some instances, students and parents may have received a master promissory note (MPN) filled in with a lender's name. We suggest you disregard this paperwork. View this, and any other similar materials that instruct you to use a particular loan provider for what they are: marketing materials. It is important to understand that you are free to choose your loan and lender, and not required to agree to one presented by the financial aid office.
MyRichUncle would like to remind parents and students that we do not have any alliances with financial aid offices. We do not provide them with any incentives whatsoever. Rather, we provide student loans directly to students and parents. Our direct approach is free of the conflicts of interest that are seemingly abundant and pervasive among certain financial aid offices and lenders. Moreover, and perhaps most importantly, our customers get better rates as a result.
Our Stafford loan product offers an upfront interest rate cut of 1% that begins at repayment. Furthermore, there is no fine print that serves to conceal how this interest rate discount could be lost. This is because our borrowers will not lose the discount, unless they default on the loan - you can make one or one hundred late payments without the anxiety that this benefit will be lost.
In addition, our PLUS loan for parents and GradPLUS loan for graduate and professional students offer an upfront interest rate cut of 1.75% that begins at repayment. Same rules apply - no fine print whereby you can lose this benefit, unless you default on the loan. Period.Labels: academy awards, career training, education online, financial aid, free college, free education, high school, scholarship, student loans, study abroad |
