Thursday, April 10, 2008

Student Loan Advice 'Concerns'

U.S. News and World Report has posted an article expressing concerns about biased student loan advice on the internet. Along with blogs, they mention Christopher Penn's financial aid podcast from The Student Loan Network.

But consumer advocates are concerned that students may not realize or consider that these educational messages are coming from people who want their business, not unbiased sources.

First of all, I highly respect Penn's podcast. He provides a wealth of useful legitimate information. Of course, he's made a business out of it too.

Second, pretty much everyone has a biased view to some degree. The U.S. News and World Report 'online' piece has advertisements on it directing you to 'biased' sources. So does my blog. Information is never totally free. The point is, even in the biased advice, there is golden information that may be of some use to you. The most unbiased source would be government web sites and that's only because they're tax payer funded.

I thought the little video embedded in the U.S. News article was interesting. They gave 3 basic tips: 1) maximize your federal loans 2) Don't take out more money than necessary 3) Seek advice from the financial aid office.

Not taking out more money than necessary is golden advice. Maximizing your federal loans is also a must but you know you're still going to end up short on the needed cash. The thing you need to be most careful about is the financial aid office student loan advice. You'll generally get good advice but there's also a good chance you'll also get "biased" advice. The whole industry has been tainted the last couple of years because sweetheart deals between universities and loan companies

... major colleges received financial benefits for touting lenders that didn't necessarily offer the best deals for students. Some of these exclusive deals were greased with "gifts" such as free computing services or outright bribes to college loan officers.

My student loan advice to you: Soak in information from every source possible but use critical thinking skills to make the right choice for you.