University Business - July/August 2011 - (Page 30)

money m at t e r s Ann Whitmer, director of financial aid, explains, each month will have a theme, with one dedicated to financial literacy. Planners are targeting not only students, but also faculty and staff. CashCourse, a free non-commercial resource sponsored by The National Endowment for Financial Education, has been used by the college and will become a more prevalent part of initiatives next year. When Ellen Richter-Norgel, director of student retention at St. Catherine University (Minn.), attended a conference session about financial literacy presented by University of North Texas staff, she was quite impressed with the work they had done. Armed with ideas and energy, she returned to her own campus where an interdisciplinary team of faculty and staff formed the University Financial Literacy Committee. Here, the seed was planted for St. Kate’s “Money Doesn’t Grow On Trees” money management program. The work was funded through grants at first, but now St. Kate’s funds a position that involves organizing a speaker series and peer money mentors involved in both outreach and education. Testament to the student mentoring, says Richter-Norgel, is the waiting list for students to meet with the certified consumer credit counselor from Lutheran Social Services who comes to campus for one-on-one appointments to discuss budgeting, credit card debt, and loan repayment options. Signs of overall program success include a dramatic reduction in the number of students referred to outside collection agencies due to overdue bills. NavigaTiNg ReqUiRemeNTS Against this backdrop of financial literacy education efforts is the irony that institutions must meet new, more burdensome requirements when intending to provide information about alternative loans to help students finance their education. The Higher Education Opportunity Act (HEOA) of 2008 added these requirements for colleges using a preferred lender list or preferred lender arrangement for 30 | July/August 2011 alternative loans. A 2008 Dear Colleague Letter on the subject indicated that a preferred lender list can be an effective tool to help families looking for student loans to finance the costs of postsecondary education, when the list reflects the school’s unbiased research to identify lenders. Yet the list of requirements is long for institutions that decide to enter into a preferred lender arrangement or provide a ‘I can’t imagine sending first-generation families off on their own to Google options for private loans.’ —Christine Saadi, Alvernia University list of preferred lenders. Among the items on the list are: displaying the application/ solicitation disclosure from each lender on the institution’s website, having at least two unaffiliated private lenders, disclosing the lender selection criteria, advising students that they don’t have to borrow from a lender on the list, and providing information about Title IV aid. Institutions must also submit a publicly-available report annually to the education department on each lender on the list. Nazareth College (N.Y.) opted to use a third-party lender list from Student Lending Analytics, an independent research and advisory firm with no affiliation with any outside lenders. This meets requirements because the neutral listing doesn’t endorse or recommend any lenders on the list, and there’s no fee paid to the third party based on loan volume generated. Luther College maintained a preferred lender list prior to the HEOA regulations of 2008. When the new regulations were announced, administrators first chose to provide a comprehensive historical list of private lenders used by their students over recent years. This option does not require an institution to include the myriad disclosure and reporting requirements. But aid director Janice Cordell says it was not serving students well. She and her staff knew there were lenders on the list that Luther wouldn’t recommend. But, excluding lenders would have constituted a preferred lender arrangement. Officials chose to get back into the preferred lender list business by using FASTChoice, a loan comparison tool from Great Lakes Higher Education Corporation, which allows students to compare loans side-by-side. Eight lenders with a total of 11 separate options are now listed on the Luther-specific portion of the FASTChoice site. Cordell said this works well. Alvernia leaders decided on their own preferred lender list from the get-go. Director of Student Financial Planning Christine Saadi says not a day goes by that she or some member of her staff isn’t asked for advice about alternative loan options. She notes, “I can’t imagine sending first-generation families off on their own to Google options for private loans.” Officials came up with categories of information required from potential lenders, including the obvious criteria of interest rate structure, repayment terms, and annual loan limits, as well as information about past due balance options, whether satisfactory academic progress is required, customer service info/bilingual options, and cosigner release options. How we goT HeRe So how did we get to the point of having more stringent regulations related to providing advice about alternative loan borrowing, at a time when financial literacy has become increasingly important? Dial back to 2007 when inquiries into lender/school relationships became headline news. First in New York and then elsewhere, certain practices and arrangements were questioned. A few bad apples, in this situation on both the lending and school side, drew widespread attention that led to some sweeping regulatory changes. The vast majority of aid officers and lenders do their best daily to help students and families figure out viable financing options to pay college costs. But now it’s more time consuming and cumbersome to do so. universitybusiness.com http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - July/August 2011

University Business - July/August 2011
Contents
Editor's Note
Ad Index
College Index
Behind the News
Sense of Place
Viewpoint
Financial Success
Money Matters
Community Colleges
Funding Capture
Models of Efficiency
Thwarting ID Thieves
Embezzlement Epidemic
What's New
End Note

University Business - July/August 2011

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