University Business - November 2008 - (Page 28)

FINANCIAL AID How legislation and other actions are helping students make informed decisions By Haley Chitty New Protections for Private Student Loan Borrowers INA NCI A L A ID A DMINI strators are leading the fight against misleading direct-toconsumer (DTC) marketing of private student loans, but it can feel like a losing battle at times. Fortunately, the recent reauthorization of the Higher Education Act and the efforts of New York Attorney General Andrew Cuomo have given financial aid offices new tools to protect students and parents who borrow private loans to finance higher education. At best, private education loans can provide students and parents with much needed additional funds to enable them to pay for higher education. At worst, private loans can be exploited by predatory lenders who pressure students and parents into excessive borrowing through high-interest loans that can make them ineligible for other, less expensive, financial aid. Any financial aid administrator can provide the anecdotal evidence of the poor student who is awarded a private loan with a 16 percent interest rate that exceeds the institution’s cost of attendance (COA), causing the student to lose out on other financial aid. Aggregate data on private loans can be hard to come by because these loans encompass the fastest growing sector of college financial aid, and because they are sometimes made without the financial aid office knowing about them. The American Council on Education (ACE) compiled some data on private loans. While the data is not complete, it offers a glimpse into some of the problems with these loans. F A provision to require private loans to be certified by the financial aid office did not make it into the final bill. According to ACE analysis of the U.S. Department of Education’s National Postsecondary Student Aid Study (NPSAS) data: • More than 10 percent of private loan borrowers don’t apply for other types of aid. • Nearly 25 percent of private loan borrowers did not borrow a Federal Stafford Loan. • Excluding students who don’t meet federal student loan eligibility requirements (such as noncitizens), 20 percent of undergraduate private loan borrowers did not take advantage of federal student loans before borrowing private loans. Half of these students did not file the required application for federal student loans. Many of the students and parents who fall victim to DTC marketing of private student loans do not receive counseling from the financial aid office. Because private loans are sometimes made directly to students, the financial aid office may not ever know the student is receiving these funds. ADDITIONAL LEGISLATION PROTECTIONS Although Congress did not implement all the borrower protections advocated by the National Association of Student Financial Aid Administrators and most of the higher education community, the Higher Education Opportunity Act (HEOA) did make some inroads to protect borrowers from the negative consequences of borrowing private student loans. Signed into law in August, the HEOA restricts some private loan marketing that can be misleading and requires lenders to disclose significantly more information about private loan alternatives. Congress considered provisions that would have required private loans to be certified by the financial aid office and allowed private 28 | November 2008 universitybusiness.com http://www.universitybusiness.com

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

University Business - November 2008
Contents
Editor's Note
College Index
Company Index
Advisory Board
Behind the News
Sense of Place
Viewpoint
Human Resources
Financial Aid
Money Matters
Community Colleges
Expansion, without the Red Tape
Coming to You by Video
Challenging Authority
Road Tour
What's New
End Note

University Business - November 2008

https://www.nxtbook.com/pmg/UB/UB_0520
https://www.nxtbook.com/pmg/UB/UB_0320
https://www.nxtbook.com/pmg/UB/UB_0120
https://www.nxtbook.com/pmg/UB/UB_1119
https://www.nxtbook.com/pmg/UB/UB_1019
https://www.nxtbook.com/pmg/UB/UB_0819
https://www.nxtbook.com/pmg/UB/UB_0719
https://www.nxtbook.com/pmg/UB/UB_0619
https://www.nxtbook.com/pmg/UB/UB_0419
https://www.nxtbook.com/pmg/UB/UB_0319
https://www.nxtbook.com/pmg/UB/UB_0119
https://www.nxtbook.com/pmg/UB/UB_1218
https://www.nxtbook.com/pmg/UB/UB_1118
https://www.nxtbook.com/pmg/UB/UB_1018
https://www.nxtbook.com/pmg/UB/UB_0918
https://www.nxtbook.com/pmg/UB/UB_0818
https://www.nxtbook.com/pmg/UB/UB_0718
https://www.nxtbook.com/pmg/UB/UB_0618
https://www.nxtbook.com/pmg/UB/UB_0518
https://www.nxtbook.com/pmg/UB/UB_0418
https://www.nxtbook.com/pmg/UB/UB_0318
https://www.nxtbook.com/pmg/UB/UB_0218
https://www.nxtbook.com/pmg/UB/UB_0118
https://www.nxtbook.com/pmg/UB/UB_1217
https://www.nxtbook.com/pmg/UB/UB_1117
https://www.nxtbook.com/pmg/UB/UB_1017
https://www.nxtbook.com/pmg/UB/UB_0917
https://www.nxtbook.com/pmg/UB/UB_0817
https://www.nxtbook.com/pmg/UB/UB_0717
https://www.nxtbook.com/pmg/UB/UB_0617
https://www.nxtbook.com/pmg/UB/UB_0517
https://www.nxtbook.com/pmg/UB/UB_0417
https://www.nxtbook.com/pmg/UB/UB_0317
https://www.nxtbook.com/pmg/UB/UB_0217EPUB
https://www.nxtbook.com/pmg/UB/UB_0217
https://www.nxtbook.com/pmg/UB/UB_0117
https://www.nxtbook.com/pmg/UB/UB_1216
https://www.nxtbook.com/pmg/UB/UB_1116
https://www.nxtbook.com/pmg/UB/UB_1016
https://www.nxtbook.com/pmg/UB/UB_0916
https://www.nxtbook.com/pmg/UB/UB_0816
https://www.nxtbook.com/pmg/UB/UB_0816CG
https://www.nxtbook.com/pmg/UB/UB0716
https://www.nxtbook.com/pmg/UB/GlobalSellSheet
https://www.nxtbook.com/pmg/UB/UB_0616
https://www.nxtbook.com/pmg/UB/UB_0516
https://www.nxtbook.com/pmg/UB/UB0416
https://www.nxtbook.com/pmg/UB/UB0316
https://www.nxtbook.com/pmg/UB/UB_0216r2
https://www.nxtbook.com/pmg/UB/UBGuide
https://www.nxtbook.com/pmg/UB/UB0116
https://www.nxtbook.com/pmg/UB/UB
https://www.nxtbook.com/nxtbooks/pmg/ub201511
https://www.nxtbook.com/nxtbooks/pmg/ub201510
https://www.nxtbook.com/nxtbooks/pmg/ub201509
https://www.nxtbook.com/nxtbooks/pmg/ub201508
https://www.nxtbook.com/nxtbooks/pmg/ub201508_ConsultantsGuide
https://www.nxtbook.com/nxtbooks/pmg/ub201507
https://www.nxtbook.com/nxtbooks/pmg/ub201506
https://www.nxtbook.com/nxtbooks/pmg/ub201506_AudioVisualSolutions
https://www.nxtbook.com/nxtbooks/pmg/ub201505
https://www.nxtbook.com/nxtbooks/pmg/ub201504
https://www.nxtbook.com/nxtbooks/pmg/ub201503
https://www.nxtbook.com/nxtbooks/pmg/ub201502
https://www.nxtbook.com/nxtbooks/pmg/ub201501
https://www.nxtbook.com/nxtbooks/pmg/ub201501_FinancialServicesGuide
https://www.nxtbook.com/nxtbooks/pmg/ub201412
https://www.nxtbook.com/nxtbooks/pmg/ub201411
https://www.nxtbook.com/nxtbooks/pmg/ub201410
https://www.nxtbook.com/nxtbooks/pmg/ub201409
https://www.nxtbook.com/nxtbooks/pmg/ub201408
https://www.nxtbook.com/nxtbooks/pmg/ub201408_ConsultantsGuide
https://www.nxtbook.com/nxtbooks/pmg/ub201407
https://www.nxtbook.com/nxtbooks/pmg/ub201406
https://www.nxtbook.com/nxtbooks/pmg/ub201406_AudioVisualSolutions
https://www.nxtbook.com/nxtbooks/pmg/ub201405
https://www.nxtbook.com/nxtbooks/pmg/ub201404
https://www.nxtbook.com/nxtbooks/pmg/ub201403
https://www.nxtbook.com/nxtbooks/pmg/ub201402
https://www.nxtbook.com/nxtbooks/pmg/ub201401
https://www.nxtbook.com/nxtbooks/pmg/ub201401_FinancialServicesGuide
https://www.nxtbook.com/nxtbooks/pmg/ub201312
https://www.nxtbook.com/nxtbooks/pmg/ub201311
https://www.nxtbook.com/nxtbooks/pmg/ub201310
https://www.nxtbook.com/nxtbooks/pmg/ub201309
https://www.nxtbook.com/nxtbooks/pmg/ub201308
https://www.nxtbook.com/nxtbooks/pmg/ub201308_ConsultantsGuide
https://www.nxtbook.com/nxtbooks/pmg/ub201307
https://www.nxtbook.com/nxtbooks/pmg/ub201306_AudioVisualSolutions
https://www.nxtbook.com/nxtbooks/pmg/ub201306
https://www.nxtbook.com/nxtbooks/pmg/ub201305
https://www.nxtbook.com/nxtbooks/pmg/ub201304
https://www.nxtbook.com/nxtbooks/pmg/ub201303
https://www.nxtbook.com/nxtbooks/pmg/ub201302
https://www.nxtbook.com/nxtbooks/pmg/ub201301
https://www.nxtbook.com/nxtbooks/pmg/ub201301_FinancialServicesGuide
https://www.nxtbook.com/nxtbooks/pmg/ub1212
https://www.nxtbook.com/nxtbooks/pmg/ub1112
https://www.nxtbook.com/nxtbooks/pmg/ub1012
https://www.nxtbook.com/nxtbooks/pmg/ub0912
https://www.nxtbook.com/nxtbooks/pmg/ub_cg12
https://www.nxtbook.com/nxtbooks/pmg/ub070812
https://www.nxtbook.com/nxtbooks/pmg/ub0612
https://www.nxtbook.com/nxtbooks/pmg/ub_avguide0612
https://www.nxtbook.com/nxtbooks/pmg/ub0512
https://www.nxtbook.com/nxtbooks/pmg/ub0412
https://www.nxtbook.com/nxtbooks/pmg/ub0312
https://www.nxtbook.com/nxtbooks/pmg/ub0212
https://www.nxtbook.com/nxtbooks/pmg/ub_financeguide0112
https://www.nxtbook.com/nxtbooks/pmg/ub1211
https://www.nxtbook.com/nxtbooks/pmg/ub1011
https://www.nxtbook.com/nxtbooks/pmg/ub0911
https://www.nxtbook.com/nxtbooks/pmg/ub_cg11
https://www.nxtbook.com/nxtbooks/pmg/ub0711
https://www.nxtbook.com/nxtbooks/pmg/ub0611_av
https://www.nxtbook.com/nxtbooks/pmg/ub0611
https://www.nxtbook.com/nxtbooks/pmg/ub0511
https://www.nxtbook.com/nxtbooks/pmg/ub0411
https://www.nxtbook.com/nxtbooks/pmg/ub0311
https://www.nxtbook.com/nxtbooks/pmg/ub0211
https://www.nxtbook.com/nxtbooks/pmg/ub0111
https://www.nxtbook.com/nxtbooks/pmg/ub_financeguide0111
https://www.nxtbook.com/nxtbooks/pmg/ub1110
https://www.nxtbook.com/nxtbooks/pmg/ub1010
https://www.nxtbook.com/nxtbooks/pmg/ub0910
https://www.nxtbook.com/nxtbooks/pmg/ub_2010financeguide
https://www.nxtbook.com/nxtbooks/pmg/ub_2010consultants
https://www.nxtbook.com/nxtbooks/pmg/ub_2010avguide
https://www.nxtbook.com/nxtbooks/pmg/ub0710
https://www.nxtbook.com/nxtbooks/pmg/ub0610
https://www.nxtbook.com/nxtbooks/pmg/ub0510
https://www.nxtbook.com/nxtbooks/pmg/ub0410
https://www.nxtbook.com/nxtbooks/pmg/ub0310
https://www.nxtbook.com/nxtbooks/pmg/ub0210
https://www.nxtbook.com/nxtbooks/pmg/ub0110
https://www.nxtbook.com/nxtbooks/pmg/ub1109
https://www.nxtbook.com/nxtbooks/pmg/ub1009
https://www.nxtbook.com/nxtbooks/pmg/ub0909
https://www.nxtbook.com/nxtbooks/pmg/ub0709
https://www.nxtbook.com/nxtbooks/pmg/ub_fg09
https://www.nxtbook.com/nxtbooks/pmg/ub0609
https://www.nxtbook.com/nxtbooks/pmg/ub0509
https://www.nxtbook.com/nxtbooks/pmg/ub0409
https://www.nxtbook.com/nxtbooks/pmg/ub0309
https://www.nxtbook.com/nxtbooks/pmg/ub0209
https://www.nxtbook.com/nxtbooks/pmg/ub0109
https://www.nxtbook.com/nxtbooks/pmg/ub1208
https://www.nxtbook.com/nxtbooks/pmg/ub1108
https://www.nxtbook.com/nxtbooks/pmg/ub1008
https://www.nxtbook.com/nxtbooks/pmg/ub0908
https://www.nxtbook.com/nxtbooks/pmg/ub0808
https://www.nxtbook.com/nxtbooks/pmg/ub0708
https://www.nxtbook.com/nxtbooks/pmg/ub0608
https://www.nxtbook.com/nxtbooks/pmg/ub0508
https://www.nxtbook.com/nxtbooks/pmg/ub0408
https://www.nxtbook.com/nxtbooks/pmg/ub0308
https://www.nxtbook.com/nxtbooks/pmg/ub0208
https://www.nxtbook.com/nxtbooks/pmg/ub0907
https://www.nxtbook.com/nxtbooks/pmg/ub0807
https://www.nxtbook.com/nxtbooks/pmg/ub0707
https://www.nxtbook.com/nxtbooks/pmg/ub0607
https://www.nxtbook.com/nxtbooks/pmg/ub0507
https://www.nxtbook.com/nxtbooks/pmg/ub0407
https://www.nxtbook.com/nxtbooks/pmg/ub0307
https://www.nxtbook.com/nxtbooks/pmg/ub0207
https://www.nxtbook.com/nxtbooks/pmg/ub0107
https://www.nxtbook.com/nxtbooks/pmg/ub1206
https://www.nxtbook.com/nxtbooks/pmg/ub1106
https://www.nxtbook.com/nxtbooks/pmg/ub1006
https://www.nxtbook.com/nxtbooks/pmg/ub0906
https://www.nxtbook.com/nxtbooks/pmg/ub0806
https://www.nxtbook.com/nxtbooks/pmg/ub0706
https://www.nxtbook.com/nxtbooks/pmg/ub0606-GG
https://www.nxtbook.com/nxtbooks/pmg/ub0606
https://www.nxtbook.com/nxtbooks/pmg/ub0506
https://www.nxtbook.com/nxtbooks/pmg/ub0406
https://www.nxtbookmedia.com