<p>I suggest everyone write a letter to their congressperson suggesting the need for loans to be removed from the financial aid package and sent in a separate envelope as "additional financial suggestions." </p>
<p>The two should not even be in the same letter, let along on the same page.</p>
<p>It's misleading.</p>
<p>ETA: I'm full pay, so just an outraged observer of this dance.</p>
<p>If a college states on it’s website that loans are a component of their FA packages, then it would not be considered fraud. The expectation is that the family contribution will come from past savings, current income and future loans.</p>
<p>Federal loans such as Staffords are one thing. But putting Parent Plus loans into a financial aid package is certainly on the edge of fraud. The only things that should be in that package are things that the student qualifies for.</p>
<p>poetgirl, if you send me a model letter, I will definitely fire off copies to my men and women in congress!</p>
<p>A loan that a student (Stafford & Perkins) or parent (Parent Plus) would never qualify for in the private lending market is indeed a form of financial aid. What is the issue here? That applicants are confused and disappointed when their finaid packages include loans? Hardly a concern for Congress. That people intelligent enough to attend college claim not to understand the meaning of the term “loan”? Also not a concern for Congress. I suppose some anger could be directed at colleges which claim to meet full need but leave their process for determining need cloaked in mystery, or fail to explain that their finaid packages will typically include loans when encouraging applicants with a “we’ll make it work!” message. But even the latter is just sales puffery, not fraud.</p>
<p>I agree with Happymom…the PLUS loans should not be be included in the student’s financial aid package unless it’s in a different paragraph or a different letter.</p>
<p>Considering that congress is still bailing out the banks because there were an awful lot of fully fledged “grownups” who couldn’t understand the potential consequences of the mortgages they were taking out (or writing for that matter), perhaps we are at a point in time when someone will start to listen.</p>
<p>College is not a right. A college does not have to pay for its students to come there if they can’t afford to. A loan is simply an option. To accept a finaid package you don’t have to accept the loans, you can accept it piece by piece.</p>
<p>In no way shape or form do I believe a college has to pay for a student to go there. </p>
<p>However, in no way shape or form are loans financial aid for the kids. They are financial aid for the colleges, which allow them to keep their tuition costs high, financed on the backs of young men and woman who may be qualified to go to college but do not have the experience to understand the weight of debt, the true COST of borrowed money. </p>
<p>So, I believe that loans should be sent in a separate envelope with an explanation as to what the loans really mean. </p>
<p>Why on EARTH would anyone object to something being done to protect and educate these 18 year olds from the only debt in the US which cannot be discharged through bankruptcy? That makes no sense at all to me.</p>
<p>At the very least, at that point, the 18 year old could make an “educated” choice. If they didn’t need further education, why would they be going to college to begin with? </p>
<p>Happymom, I will get a letter together in the next couple of days.</p>
<p>At least in my financial aid package, it stated everything about the loan. It’s just one little click on the online portal that gave interest rates, future payment, etc. It’s not like it says “here’s free money.” Also, many colleges do require that people who take out loans take an education class about them before. I don’t know what college you are referring to, but at the ones I have applied to, that is the case. They make it very clear it is not free money, and that coming to the school is a choice.</p>
<p>I don’t object to protecting people from loans. But it really does happen already. It is the choice of those with the loans to take them out.</p>
<p>I don’t actually question the motives of the colleges in this, to be honest. It is the banks, who have this unbankruptable protection, who make these loans at rates higher than other loans (even though they are no risk loans to the bank, since they are garaunteed), who I see as being predatory on those who may not have a great understanding of money to begin with…</p>
<p>I’m very encouraged to hear that your school is educating students about debt. For the students, just in general, this is very good news.</p>
<p>I still maintain a major issue is that private student loans can not be discharged in bankruptcy, so banks have much less incentive to loan responsibly. I urge all to support HR 5043, which would change this, and is supported by many legislators and educators. [H.R.5043:</a> Private Student Loan Bankruptcy Fairness Act of 2010 - U.S. Congress - OpenCongress](<a href=“OpenCongress - Track bills, votes, senators, and representatives in the U.S. Congress”>OpenCongress - Track bills, votes, senators, and representatives in the U.S. Congress)</p>
<p>Private student loans are the only private, non-guaranteed debt that can not be discharged in BK. Other things that can no be discharged are taxes, child support, alimoney and government debt. All of these other things are either set by the governement or reviewed by court.</p>
<p>This will become a major issue. The banks want it to be a problem of the students or the taxpayers. We must get this changed now.</p>
<p>thanks Kayf. That is my point, though you said it much better.</p>
<p>Thank you PoetGirl. I see very limited “good” use of private student loans. For example, lets say someone has borrowed Stafford loan amount first 3 years of college. Lets even say student is at Wharton or MIT. Now year 4 rolls around, and his parents are not able to help, but not poor enough for aid. Yes, that kid should be able to borrow more.</p>
<p>And btw, Bankruptcy laws have gotten much tougher in general. So kids can not just declare, courts can tell them to work and try harder. So there is no reason these private student loans should get special status in BK</p>
<p>I agree and think that the finaid packages are misleading. If its a loan then its not weight off my shoulders. Aid should be something that doesn’t get paid back. As for the loans the interest rates are terrible. Again, if the loans are to be considered aid then give us a break and make the loan interest something more palable than 8%. Yuk!!! That number after 4.5 years of just collecting interest and then 10 years of payments after can do some real damage. If its hard for parents to wrap their minds around it, I can’t imagine a 17/18 year old.</p>