Bates College, Lewiston
Catherine Ganung, student financial services director
Average student debt at graduation: $13,567 (federally backed only)
“We try to keep lending to a minimum.”
On its preferred lender list: Nelnet
For a lender to get on the list, the school considers the lender’s honesty and customer service.
Advice:
• Try every avenue before borrowing
• Be careful about private loans
• Ask your college financial aid any questions
Bowdoin College, Brunswick
Steve Joyce, student aid director
Average student debt at graduation: about $16,000 (federally backed only)
“We monitor that fairly closely so the debt doesn’t get so high that money is a driving force in their career decisions.”
On its preferred lender list: Wachovia, NorthStar Bank, Nelnet
For a lender to get on the list, the school considers a lender’s corporate behavior, customer service, loyalty to student and interest rate/incentives.
Advice:
• Research and compare lenders
• Talk to the college about the lenders on its preferred lender list. Consider the financial aid office’s recommendation.
• Go to federally backed loans (Stafford, Perkins and PLUS) before private loans.
• Check out your trusted local bank’s loans, but be aware that many sell loans and won’t be around come repayment time.
Colby College, Waterville
Steve Thomas, admissions director, and Lucia Whittelsea, financial aid director
Average student debt at graduation: about $18,000 (federally backed only)
On its preferred lender list: TD Banknorth, Nelnet, Maine Education Loan Authority, Maine Education Services.
For a lender to get on the list, the school considers lenders that offer the best deal for students, advantageous repayment plans, high quality service and an electronic interface with the school.
Advice:
• Educate yourself.
• Read the fine print. Some lenders offer elaborate incentives, but those incentives may disappear if the loan is sold to someone else…. and most loans are sold.
• Make sure you’re comfortable with the loan and lender. Ask questions. (How much are payments? How long will it take to pay back? How much will I have paid by the end of the loan? What are the chances the loan will be sold?)
• It’s OK to be worried about taking out loans, but realize a college education is an excellent investment.
University of Maine at Orono
Mary Dyer, financial aid assistant director
Average student debt at graduation: $16,700 (federally backed only)
“It’s one of those necessary evils. There’s just not enough grant money to go around.”
On its preferred lender list: Citibank, Bank of America, Maine Education Services, Norway Savings Bank, TD Banknorth, Nelnet, University Credit Union.
For a lender to get on the list, the school sends out a formal request for information with 85 questions that range from the lender’s default rate to its hold times for customer service calls.
Advice:
• Fill out the FAFSA on time, even if you don’t think you qualify for student aid.
• Go to federally-backed loans (Stafford, Perkins and PLUS) before private loans.
• Try a payment plan and look at the federally backed loan for parents (PLUS) if money is tight.
• Think about your situation before taking out a home equity loan. Be cautious. You risk losing your house.
• When in doubt, go with the lender with whom you’re familiar and have had a good experience.
• Research lenders and call your college’s financial aid office with questions.
University of Maine at Farmington
Ron Milliken, financial aid director
Average student debt at graduation: $16,000 (federally backed only)
Most UMF students take out at least one loan.
On its preferred lender list: Maine Advantage Loan Program (through FISC), Bank of America’s HELPP Loan, Nelnet.
For a lender to get on the list, the school considers the lenders most used by UMF students, the benefits lenders offer students and the lender’s reputation.
Advice:
• Review financial aid notice carefully.
• Review preferred lender list.
• Look for benefits above and beyond the basic loan. (Such as no fees, a discounted interest rate, on-time payment incentives, etc.)
• Look for a lender that’s easy to deal with.
• Go to your financial aid office for help.
• It’s a red flag if the lender tries to say they’re the only choice.
Central Maine Community College, Auburn
Monique Schreiber, financial aid director
Average student debt at graduation: $12,000 (federally backed only)
“College can be affordable, but you have to plan for it.”
On its preferred lender list: Nelnet, TD Banknorth, Maine Education Services, Citibank.
For a lender to get on the list, the school considers a lender’s customer service, how understandable the lender’s loan statements are to students and how much help the lender is willing to offer CMCC when it comes to student loan counseling, budget workshops, orientation, etc.
Advice:
• Always submit the FAFSA early
• Work and save your money for college
• Don’t show up at college with no money in your pocket
• Make wise choices with money in mind (Commuting vs. living on campus, for example)
University of Southern Maine
Keith DuBois, financial aid director
Average student debt at graduation: $22,183 for undergrads and $39,602 for graduate students (federally backed only)
About 50 percent of students take out at least one loan.
On its preferred lender list: Bank of America, TD Banknorth, Citizens Bank, Key Bank, Nelnet and Norway Savings Bank. (USM refers to this as a zero-fee list, not a preferred lender list.)
For a lender to get on the list, the school considers only those lenders that offer no fees.
Advice:
• Look for ways to minimize expenses
• Get a work-study job or a part-time job during the school year
• Work during the summer and save money for college
Andover College
Officials could not be reached for comment.
Clamping down
Twenty-five schools have entered into agreements with the New York Attorney General’s Office to distance themselves from preferred lenders, adopt codes of conduct and re-pay money received from lenders. Twenty-three of the schools are listed below, along with the known dollar amount Attorney General Andrew Cuomo believes each school or some member of its staff received in benefit:
Capella University, Minnesota: $12,400
Career Education Corporation, Illinois: $21,200
Columbia University, New York: $1.125 million
DeVry University, Illinois: $88,112
Dowling College, New York: Marketed Sallie Mae exclusively to students seeking to consolidate their loans.
Drexel University, Pennsylvania: $250,000
Fordham University, New York: $13,840
Lewis & Clark College, Oregon: $9,000, plus meals and trips
Long Island University, New York: $2,435
Manhattanville College, New York: Printing services and theater tickets.
Marist College, New York: $5,000
Mercy College, New York: $5,000
Molloy College, New York: $1,600
New York Institute of Technology, New York: Sponsorship of university events and scholarships.
New York University, New York: $1,394,563
Pace University, New York: Sallie Mae employees staffed university financial aid call centers and falsely identified themselves as university employees.
Pratt Institute, New York: One employee’s travel, lodging and meals.
Salve Regina University, Rhode Island: $7,839
St. John’s University, New York: $80,553
Syracuse University, New York: $164,084
Texas Christian University, Texas: $13,883
University of Pennsylvania, Pennsylvania: $1,617,580
Washington University, Missouri: Printing costs for informational materials provided to prospective and current students.
For information on the precise allegations made against each school, go to: www.oag.state.ny.us
Source: New York Attorney General’s Office
Definitions
Federal loans: Backed by the government, Stafford, Perkins and PLUS (for parents) loans have capped interest rates lower than private student loans. A Perkins loan may be forgiven if the student works in a high-need profession, such as education, nursing or law enforcement. Rates are expected to be 6.8 percent fixed for Stafford, 5 percent fixed for Perkins, 8.5 percent fixed for PLUS loans.
• Subsidized federal loans: Interest is paid by the government until the student leaves school. Students qualify based on income and financial need.
• Unsubsidized federal loans: Students pay the interest while in school. There are no income limits and anyone can receive it.
• Parent (federal) PLUS loans: Parents take out the loans and a credit check is generally required. Interest and principal payments must be made while the student is in school.
• Private loans: The interest rate is often higher than a federal loan and a credit check or co-signer are usually required. Generally, payments must be made while the student is in school or interest accrues. Lenders can rule a student is in default after one missed payment.
Sample loan
Loan balance: $20,000
Loan interest rate: 6.8%
Loan term: 10 years
Monthly payment: $230.16
Cumulative payment: $27,619.31
Total interest paid: $7,619.31
Source: www.finaid.org
FMI
www.famemaine.com
www.studentaid.ed.gov or 1-800-4-FED-AID
www.finaid.org
www.fafsa.ed.gov
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