University Business - July 2008 - (Page 30)

FINANCIAL AID battle to inform parents and families about and discredit these misleading advertising eﬀorts. So making a concerted eﬀort to have all students contact the ﬁnancial aid oﬃce before borrowing student loans is key. This visit can save students—and institutions—from serious problems. In most cases, the negative impact of a student’s borrowing without consulting the ﬁnancial aid oﬃce is felt by the student, the family, and the institution. Unfortunately, low-income borrowers are the most likely to fall victim to misleading advertising. Student loan terms are complex and virtually indecipherable for those with little or no knowledge of ﬁnancing. Students who borrow directly from a lender without consulting the aid oﬃce are more likely to: • Miss out on federal, state, and institutional ﬁnancial aid. • Take out loans, especially private loans, before exhausting other forms of aid. • Receive loans with less than optimal rates and terms because they do not understand what they are signing. • Borrow more than they need, resulting in excessive debt. • Choose more costly loan products. HOW COUNSELING BENEFITS THE COLLEGE Providing student loan counseling before students borrow can help families avoid many pitfalls and ensures that more students can successfully complete their program. Schools must also make sure that aid received doesn’t exceed the Cost of Attendance when certifying loans, since the school would be responsible for repaying the over-award. Students who receive more grant aid before borrowing will have less debt and be less likely to drop out because of unmanageable ﬁnances. Similarly, those who borrow only what they need and get a better deal on loans will be less likely to default on their loans after graduation. Also, these graduates will be in a better position as alumni to support the school, and may have more positive feelings about their school experience. Most students and parents who have been misled by DTC marketing usually end up in the ﬁnancial aid oﬃce seeking to undo the damage done by their poor ﬁnancial choices. Providing up-front counseling can help prevent these problems from occurring in the ﬁrst place. In addition to oﬀering unbiased student loan advice, the ﬁnancial aid oﬃce has comprehensive knowledge about all available ﬁnancial aid options. A SIMPLE SOLUTION The key takeaway here: Make sure all students consult the ﬁnancial aid oﬃce before borrowing. This should be a campuswide eﬀort, as it can’t be achieved solely by the aid oﬃce. A little time invested up front— e.g., posting information online, prominently including it in application materials, integrating it into academic advising processes—will help students as well as colleges and universities avoid student loan pitfalls. Excellence is affordable. You can have it all: superior financial aid functionality, the convenience and cost efficiency of web-based technology, plus easy integration with your core administrative systems. FINANCIER,™ from the people who understand that administering financial aid is about more than just numbers. 1-888-WOLFFPACK • www.wolffpack.com • e-mail: sales@wolffpack.com 30 | July 2008 universitybusiness.com http://www.wolffpack.com http://www.wolffpack.com http://universitybusiness.com

Table of Contents for the Digital Edition of University Business - July 2008

University Business - July 2008
Contents
College Index
Company Index
Advisory Board
Editor's Note
Behind the News
Viewpoint
Money Matters
Financial Aid
Human Resources
Students in Need, Schools at the Ready
Security Officers Speak Out
Advancement Goes Digital
A New Day for NASFAA
Sustainable Admissions
What's New
End Note

University Business - July 2008