College Planning Specialists

October 18, 2007

College Planning Specialists: What the Nation’s 6 Largest Student Loan Providers Do NOT Want You To Know

In my last article, I began the process of throughly outlining what is one of the most overlooked yet greatest methods of financing a college education: College Planning Specialists. In previous months I have reported on the banking scandal that rocked University of Texas and other large institutions. This scandal involved the use of kick backs and illegal perks or payments made to large university student loan counselors. The trade off being those university officials would “steer” students and families into a loan program, from the kickback inducing bank, that was detrimental to the family.

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In June of this year, Attorney General Andrew Cuomo of New York outlined and implemented a Code of Conduct plan for the 6 largest student loan lenders. Cuomo’s plan includes the following 7 provisions:

1. Ban on Financial Ties. Lenders are prohibited from giving anything of value to any college in exchange for any advantage sought by the lender. This severs any inappropriate financial arrangements between lenders and schools and specifically prohibits “revenue sharing” arrangements.

2. Ban on Payments for Preferred Lender Status. Lenders may not pay or give colleges any financial benefits whatsoever to get on a college’s preferred lender list.

3. Gift and Trip Prohibition. Lenders are prohibited from giving college employees anything of more than nominal value. This includes a prohibition on trips for financial aid officers and other college officials paid for by lenders.

4. Advisory Board Rules. Lenders are prohibited from paying college employees anything of value for serving on the advisory boards of the lenders.

5. Call-Center and Staffing Prohibition. Lenders must ensure that employees of lenders never identify themselves to students as employees of colleges. No employee of a lender may ever work in or providing staffing assistance to a college financial aid office.

6. Disclosure of Range of Rates and Defaults. Lenders must disclose to any requesting school the range of rates they charge to students at the school, the number of borrowers at each rate at the school, and the lender’s historic default rate at the school. This will ensure that schools will have the information they need to select preferred lenders who are best for students and their families.

7. Loan Resale Disclosure. Lenders shall fully and prominently disclose to students and their parents any agreements they have to sell loans to any other lender.

Look at these provisions carefully. Would you want to collaborate or become a customer of an organization that is being reprimanded for provisions 2 and 3. Essentially these are rules against kickbacks. Does it not make sense to search for an alternative to the stratospheric, exorbitant costs of college tuition loans?

What would you rather have as your plan to finance a student’s education: a high interest rate and long term loan that creates financial unrest for your family for years or a financial plan that allows you to take advantage of the millions of dollars of government financial aid that goes untapped every year?

Stay tuned as the series about College Planning Specialists continues with a closer look at the services and value they provide.

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October 17, 2007

STOP Servitude to Banks Providing Tuition Financing: College Planning Specialists’ Plan to Break the Loan Cycle

In today’s world of financing for a college education, the awesome and frightening reality for many students and parents are the lack of solid tuition financing alternatives. The main method of paying for an education., outside full athletic scholarships or parents who can afford to pay without discomfort, are student loans through fiance companies bent on creating an interest rate bonaza to your detriment.

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In step with the high interest rates and never ending loan pay off dates is the fact that college tuitions are simply a rip off. There is very little competition or what analysits call downward pressure on college tuition pricing. In a good example of this problem, Paul Streitz’s article “The Great American College Tuition Rip Off” outlines how parents and students push for higher education at the best colleges. This demand is manipulated by those colleges that receive the highest rankings from the US News and World Reports. US News and World Reports rankings have long been a respected measuring stick to parents and students helping them identify the best institutions.

Streitz posits that without tuition price competition from equally rated universities, and with demand escalating, universities will continue to raise tuitions. These cost increases are not caused by spiraling administration costs, professor salaries, or any cost of doing business factors. Instead the true explanation is simple: universities can and do raise tuition fee because students and parents are willing to pay the costs without question.

How do students receive academic scholarships when their parents economic standing disqualifies them from aid? And how do parents whose main assets are in property and whose income is just enough to keep their household afloat help pay for their student’s educations? Is it possible to “requalify” these families in such a way as to make them eligible for financial aid after all? The answer to the last question is a resounding YES!

Right now is the right time to look for alternatives to the traditional loan rip offs. Now is the time to investigate and engage with a new method to pay for college. Now is the time to contact College Planning Specialists.

College Planning Specialists provides a number of valuable services which in whole bring a new alternative to the traditional problem of qualifying for financial aid. The professionals at CPS Dan Evertsz and Gerna Benz provide expert analysis and an action plan that helps non qualifying (financial aid) families qualify under aid guidelines.

CPS’s Service Checklist is comprised of 24 action steps when implemented have a positive effect on qualifying a family for the millions of dollars, that go unused each year, of financial aid available. The first step is to outline a complete financial overview and analysis of a family’s assets as they relate to college as well as their budget. Analysis of the family budget, taxes, retirement and other areas of financial management gives a clear picture as to the best steps to take.

During this analysis, CPS will calculate the family’s Estimated Family Contribution (EFC). This form is a way to calculate how much a family must pay outside of the financial aid package that they qualify to receive. It is CPS job to help families understand this process, do the calculations for the family, and most valuable-provide a plan/and or recommendations to reduce the Estimated Family Contribution.

Why worry about the EFC when most families do not qualify for financial aid due to their economic standing? In many many cases Dan and Gerna have been able to find avenues for families to qualify for financial aid. Almost all of these families never thought they would qualify, never knew where to go to investigate these alternatives, and have nothing to lose by going through the College Planning Specialists consultations.

For more information please contact this blog or stay tuned for the Part 2 in my series: Stop Servitude to Banks. . .

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