If you have a student loan, or are preparing to take one out for yourself or your kids, you might be interested in a recent article over at the WSJ about how one student loan firm’s slogan of “conflict free” is making waves.
Wait! You mean student loans firms are NOT conflict free? Not all of them.
In recent months, a number of lenders have allegedly been offering incentives to university financial-aid officials in exchange for getting on the “preferred lender lists” that schools hand out to prospective student borrowers. Financial-aid officials at some of the best-known schools in the country have lost their jobs for taking stock or other payments from student-loan firms. And some of the biggest student-loan firms have reached settlements with the Attorney General’s office, totaling about $14 million.
So since lender’s can no longer trust a school’s financial aid office, many parents and students have been turning to online sources such as MyRichUncle that appeal directly to the lender. It’s an interesting concept that bypasses college lending centers entirely and puts the power back in the hands of the lenders.
So what’s the moral of this story? When asking a school’s financial aid office for recommendations, be sure to ask if the school receives any sort of kickback or incentives. If so, you might also want to use the power of Google to find direct lenders, such as MyRichUncle, who will offer “conflict free” loans (sometimes with an even lower rate).