Lender advisory boards are the latest segment of the student loan industry to come under scrutiny. Amid claims that advisory board members are paid, either directly or indirectly through undue perks and kickbacks, some are suggesting that the easiest solution is to get rid of advisory boards altogether. Knowing the tremendous value our own T.H.E. advisory board has produced over the years, we strongly disagree with this notion.
To accomplish our nonprofit mission, lowering the cost of financing a higher education, in an efficient manner, we have always felt we need to address three key goals:
1. Deliver our message of savings to schools and borrowers 2. Receive application data and deliver funds in an efficient manner 3. Provide counsel to borrowers and their families throughout the life of their loans
Because financial aid offices are the gatekeepers of loan programs, we had two options for meeting these essential goals: either create an advisory board or have a T.H.E. representative visit schools directly. We considered the pros and cons of each:
Based on this analysis, we decided to establish an advisory board, and we’re glad we did. Over the last 10 years, our advisory meetings have resulted in tremendous value for student-borrowers. With the help of our financial aid advisors, NorthStar is able to boast that no other education lender provides more savings to more students.
As a direct result of collaboration with our advisory board, we:
- Became one of the first national lenders to:
- Offer zero origination fees for FFELP loans
- Publicly announce in-school consolidation
- Established a repayment benefit that more than 95% of all students actually receive
- Designed and implemented systems and processes to offer the new Grad PLUS loan
- Created an online repayment counseling service that evaluates each individual loan for a student and offers advice on achieving the lowest-cost repayment method
- Offer a variety of practical loan calculators for students, parents and financial aid professionals
- Launched a comprehensive debt management program that educates students about wise borrowing and credit management
We appreciate the vigilance of the investigators, but we want to make sure they don’t lose sight of the real value advisory boards provide —- to students, schools and the industry as a whole.