Be Wary of Loan Search Websites
Posted 20 Nov, 2007
As evidenced by the student loan scandal earlier this year, it seems that people are always coming up with ways to make a buck off families putting their students through school.
I briefly mentioned the problem of new “loan search websites” a few months ago, but unfortunately it seems that new conflicts keep popping up. In fact, the New York Times just released an article explaining that families are relying too heavily on the internet when they research student loans.
For many families, this is all too true. As a college funding consultant, I help families plan out how best to cover their college expenses, and utilize education loans as a last resort. When a loan is the only option, I do extensive research to come up with the best loan options for my clients—a simple Google search just won’t cut it! It is important to compare lenders on such things as upfront fees, any discounts and how and when they are offered, and how interest is capitalized.
The New York Times article mentioned several loan search sites by name. I decided to check out one of them—SimpleTuition.com—for myself.
It turns out that Simple Tuition—and undoubtedly other loan search sites like it—have a financial interest in the lenders they suggest. At the bottom of their front page is a link to their “Lender Partners,” student loan lenders they “partner with” and list on their site. At the top of Simple Tuition’s Lender Partner’s page is the clear statement “We receive a transaction/referral fee when a user selects a Partner Loan product.”
According to the Times article, Simple Tuition heavily favors the lenders they receive a fee from—and that means that their comparison list may not be completely unbiased.
Student loans are a tricky business. As always, I encourage you to do thorough research before you take out a student or parent loan—and if you don’t have time, consult a professional that specializes in this specialized area of planning. It could save your family a lot of time, trouble, and money!
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding, a nationwide company that helps families find creative ways to reduce their college costs.
Photo: IMG_2200 by swruler9284
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As evidenced by the student loan scandal earlier this year, it seems that people are always coming up with ways to make a buck off families putting their students through school.
I briefly mentioned the problem of new “loan search websites” a few months ago, but unfortunately it seems that new conflicts keep popping up. In fact, the New York Times just released an article explaining that families are relying too heavily on the internet when they research student loans.
For many families, this is all too true. As a college funding consultant, I help families plan out how best to cover their college expenses, and utilize education loans as a last resort. When a loan is the only option, I do extensive research to come up with the best loan options for my clients—a simple Google search just won’t cut it! It is important to compare lenders on such things as upfront fees, any discounts and how and when they are offered, and how interest is capitalized.
The New York Times article mentioned several loan search sites by name. I decided to check out one of them—SimpleTuition.com—for myself.
It turns out that Simple Tuition—and undoubtedly other loan search sites like it—have a financial interest in the lenders they suggest. At the bottom of their front page is a link to their “Lender Partners,” student loan lenders they “partner with” and list on their site. At the top of Simple Tuition’s Lender Partner’s page is the clear statement “We receive a transaction/referral fee when a user selects a Partner Loan product.”
According to the Times article, Simple Tuition heavily favors the lenders they receive a fee from—and that means that their comparison list may not be completely unbiased.
Student loans are a tricky business. As always, I encourage you to do thorough research before you take out a student or parent loan—and if you don’t have time, consult a professional that specializes in this specialized area of planning. It could save your family a lot of time, trouble, and money!
All the best,
Deborah Fox
Deborah Fox is the founder of Fox College Funding, a nationwide company that helps families find creative ways to reduce their college costs.
Photo: IMG_2200 by swruler9284
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Subscribe by Email
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