As the article above shows, your students are actively being targeted by lenders that may not have their best interests at heart. And some lenders are bold enough to simply show up on your campus in an effort to reach their audience.

What’s an FAO to do? Take the lead to keep these aggressive marketers at bay — and your students safe from predatory lenders.

Here’s how one of our advisory board members handled this growing problem. Michelle Byers of Eastern Virginia Medical School communicated to all stakeholders (the dean, the alumni, student associations, etc.) that the financial aid office has students’ best interests in mind and, as such, has a broader perspective with which to evaluate lender offerings. Byers’ office required approval for anyone coming in to speak to students.

The most recent “Dear Colleague” letter stated: “the consolidating lender is responsible for ensuring that they follow program guidelines in consolidating loans.” Unfortunately, that’s easier said than done. We’ve been hearing from students that some lenders are not following the rules: some are consolidating loans that are not to be included per the promissory note that the student signed, some are also consolidating a single consolidation loan. The worst offenders are those lenders consolidating loans for students who don’t realize that they signed a consolidation application promissory note with another lender.

What does this mean for students?

At all of our recent advisory board meetings, we heard the same message: the origination fee credit is a valuable selling point for the T.H.E. Loan Programs.

We got the message, and we agree. Our non-profit mission is focused solely on lowering the cost of financing higher education, and this credit is one of the many ways we do that.

We’re pleased to announce this feature as part of our Grad PLUS terms for 2007-2008, effective for new loans disbursed on/after 4/1/07.

T.H.E.’s Grad PLUS terms for 2007-2008 include:

• 3% origination fee credit when the loan begins repayment
• 0% default fee
• .25% T.H.E. Bonus immediately after the first disbursement
• 1.3% T.H.E. Bonus when repayment begins