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Financial Aid counselors are typically never questioned on their recommendations, but in some cases they should have been. Many were lead to believe the advice from the financial aid counselor is a) their only option and b) in their best interest. Sadly, this is not always the case, as many people come to realize only after they’ve signed on for high-interest private student loans with firms that are not at all concerned about how they make their loan payments, only that they do it, even if it greatly reduces their quality of life.
Both parents and students have complained about the lack of counseling that they received from schools with regards to private student loans. There are many who claim that any advice that their financial aid office did offer was skewed to make private loans look more appealing than they really are and they have questioned whether these university employees were actually acting with the end-goal of simply increasing the enrollment in their school, which would allow for hikes in the price of tuition. By not providing the students with a realistic picture of their future earning potential and their ability to pay off their education loans, these counselors were setting them up for a lifetime of financial hardship and poor credit.
It is crucial to the future of this country that financial aid offices work to help those who come to them for guidance figure out a responsible way to pay for their schooling. Financial aid officers need to explain to young people and their families that high-interest loans are not generally a viable way to fund an education and that they could actually make getting a college degree a liability when it comes to their future standard of living. It’s also imperative that colleges stop the practice of recommending one private lending firm over another. If they do advise students to take on private loans in order to pay for their schooling, they need to be extremely clear about the advantages and drawbacks associated with each company. Any advice that shows a preference for one company should be considered a conflict of interest and the college must be held accountable for such practices.
When a school is working in collusion with a private lending firm, the potential for a negative outcome for the students attending it grow exponentially. There needs to be regulations that prohibit colleges from any relationship with a lending company that might harm their students and this action simply cannot come soon enough.
If you have questions or comments, please chat in the comments below or on the ChallengeStudentDebt Twitter handle.
If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, take the free challenge debt review to find out what options you have regarding your student loans.