Advice on Student Loan Options Takes On Added Importance
Every spring, many thousands of students in the Washington region face the complex task of putting together a financing plan for college. This year, controversy has grown over how the $85-billion-a-year student loan industry operates, with revelations from a New York state investigation and other probes about loan companies' ties to university financial aid offices and the government.
The Post's Amit R. Paley spoke with Robert Shireman, executive director of the Project on Student Debt, about the controversy and what it means for students and families. The organization, based in the District and Berkeley, Calif., aims to increase public understanding about debt and help students make informed choices. It is funded by the William and Flora Hewlett Foundation, the Pew Charitable Trusts and other sources. Shireman was an education adviser to the Clinton administration.
The Post: What are the major revelations students and parents should know about?
Shireman : The investigations revealed gifts, trips and [payments] from student loan companies to universities and to some college financial aid advisers. In at least some cases, these conflicts of interest resulted in students and parents getting steered towards unnecessarily large or expensive loans.
What do the revelations mean to consumers?
We used to think of financial aid officers as impartial professionals dedicated to helping students pay for college. I still believe that most are. But every day we hear about another conflict of interest, so consumers need to be cautious about the financial aid recommendations that they get.
Make sure the advice is in your best interests, not designed to make money for the school or get the adviser a free trip to the Bahamas.