Alright so you finally get your FAFSA in order…your school sends you your Financial Aid Award letter. Here is a sample Award letter…remember this only comes from the school if you filled out your FAFSA
UNIVERSITY OF LEARNING
FINANCIAL AID AWARD LETTER
2003-2004
Date: 1/21/04
ID#: 000000009
Award Information
Your awards are based on the information you reported on your Free Application for Federal Student Aid. Your eligibility for these awards may change if new information is received, including information we may receive with regard to your Satisfactory Academic Progress. The University of Learning reserves the right to adjust your awards.
Please read the Award Letter Guide, enclosed with your initial Award Letter. The Guide explains how to complete the financial aid process. Award information, the Guide, and terms and conditions for receiving aid at the University of Learning are online. You are responsible for understanding these terms and eligibility requirements.
Awards
We are pleased to offer the following assistance for the 2003-2004 academic year.
| |
Fall |
Spring |
Summer |
Total |
| Federal Pell Grant |
$1,150 |
$1,150 |
$0 |
$2,300 |
| Federal Perkins Loan |
$1,000 |
$1,750 |
$0 |
$2,750 |
| Federal Work Study Program |
$1,000 |
$1,000 |
$0 |
$2,000 |
| University of Learning Assistance Grant |
$2,000 |
$2,000 |
$0 |
$4,000 |
| University of Learning Assistance Grant |
$0 |
$1,000 |
$0 |
$1,000 |
| Direct Loan Subsidized |
$1,313 |
$2,187 |
$0 |
$3,500 |
| DC Tuition Assistance Grant Program |
$3,257 |
$3,257 |
$0 |
$6,514 |
| Other External Aid |
$750 |
$750 |
$0 |
$1,500 |
 |
| Total: |
$10,470 |
$13,094 |
$0 |
$23,564 |
| |
| Term Bill Credit |
$5,444 |
$8,055 |
$0 |
$13,499 |
| (see Award Letter Guide) |
What To Do Next:
- Verify that accurate assumptions have been used to determine your awards.
- Carefully review and follow the instructions on the Data Changes Form.
- To reduce or decline all or part of your loans, you must complete and return the Data Change Form.
- We will assume you fully accept the awards above unless you submit changes to us immediately.
- Return corrections and required documents promptly.
- Retain this letter for your records.
Now here is the tricky part. Once you accept the Financial Aid Award letter…you will need to fill out some additional paperwork in order to complete the loan process. Keep in mind that Stafford Loan is just the name of the loan, it is not a company…colleges have “preferred lenders” they use to lend them the Stafford Loan…these are the companies you will be paying back after you have finished school. Now the preferred lenders have been in the news a lot lately…because it is being investigated that schools have inappropriate relationships with the companies that are listed on their preferred lender list. In some cases it has been proven that student loan companies have offered favors and trips to school officials in order to get their company on that schools list. Here is an article from The Courier News, http://www.couriernewsonline.com/:
Experts offer advice about student loans
April 20, 2007
By Erin Calandriello STAFF WRITER
ELGIN — In the last two months, big student loan providers like SLM Corp., commonly known as Sallie Mae, have been under the microscope over under-the-table deals to benefit schools and lenders at the expense of students.
Just last week, Sally Mae, the nation’s largest student lender, dished out $2 million and agreed to modify its business practices as part of a broad probe of the student loan industry by New York Attorney General Andrew Cuomo.
Much of his focus is on “preferred lender” lists offered by college financial aid offices.
Cuomo’s team discovered preferred lenders that have provided all-expense-paid trips to exotic locations for college financial aid officers who then directed students to the lenders.
Cuomo has established a new code of conduct, which prohibits revenue sharing between lenders and schools, mandates disclosure of relationships between colleges and lenders, sets restrictions on how lenders are chosen for preferred lender lists, and bans gifts or trips to university employees from lenders.
Sallie Mae, based in Reston, Va., which has relationships with more than 5,600 schools, agreed to stop running call centers or providing additional staff for college financial aid offices.
It also will stop paying financial aid officers who serve on advisory boards and no longer will fund trips for school officials.
So far, six schools — the University of Pennsylvania, New York University, Syracuse University, Fordham University, Long Island University and St. John’s University — have agreed to reimburse students a total of $3.27 million for inflated loan prices caused by revenue sharing agreements, according to the New York Attorney General’s Office.
Issue hits close to home
Closer to home, Western Illinois University received thousands of dollars in kickbacks from student loans, officials said recently in response to a Freedom of Information Act request by the Sun-Times News Group. The arrangement — similar to ones under scrutiny in New York — ended in cash for the school whenever a student agreed to take a loan from preferred lender Nelnet. Of the $8 million in private loans made since the contract began last July, $1.8 million went to Nelnet.
Students at WIU were unaware that a small percentage of their loans — 0.5 percent — was being funneled back to the school.
In response to Sun-Times inquiries, the state’s 11 other public universities said neither their schools nor any officials received anything in exchange for including a lender on a preferred-lender list or for directing business to a lender.
However, in light of the loan scandal, colleges throughout the state spewed out advice to students on the loan process. Suggestions ranged from sticking with big-name lenders to staying with direct loans from the federal government to consolidating loans within six-months of graduation.
At University of Illinois in Urbana-Champaign, Victor Martinez, the associate director of financial aid, said direct lenders are the way to go. He said most colleges use direct lenders to prevent students from being ripped off.
“We have a direct lender,” meaning students at UIUC get their money directly from the U.S. Department of Education. The federal government pays students’ loans throughout their four years of college without going through a middleman such as Citibank or Sallie Mae.
“It’s a lot faster and we can provide better services to the students,” said Martinez. “It’s been the best one from the beginning.”
Elgin Community College’s financial aid director, John Fountain, agreed. He said direct lenders cut through the forest of loan hoopla. Fountain said about 18 percent of students at ECC use some type of financial aid.
“Direct lenders are more efficient,” said Fountain, adding ECC only uses direct lenders. “It seems intuitive. If you have one place you’re going through to do all of the paperwork, you know exactly how to get the information. Direct lenders cost the student less than going to a bank.”
The Associated Press and the Sun-Times New Group contributed to this story.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
What does all this mean? What students do not realize is that if you attend a school that does participates in the FFELP Stafford Loan lending program, the student, by law has the right to choose WHO their lender will be; regardless of who is on the school’s preferred lender list. The colleges do not tell the students this, so it is not widely known…and I have seen first hand that schools will make it almost impossible for a Stafford Loan to be approved if the student applies with a company that the school is not used to working with. However, it can be done. The reason schools make it difficult for students is because they have “relationships” with their lenders, and they are not supposed to “let” their students get Stafford Loan from other lenders. Now all of this would not be an issue if all the FFELP lenders practiced the same policy for all Stafford Loan…if it truly were a level playing field, it wouldn’t make a difference right? Although the above article states that Direct lending schools are perhaps a better way to go…I do not agree entirely with this. If you have a direct loan and have experienced their customer service, then you know why I feel this way. It believe that it is more difficult for a student to begin repaying their loans back to Direct when they graduate because their customer service for loans that are in repayment is very difficult to work with. Their rigidness often sets students off, and they feel they have no where else to turn to get simple questions answered before they begin repaying their loans. My point with this blog is to let students know that they have rights they are not aware of. They have choices their schools do not convey to them. Do your research on your schools preferred lenders…if you don’t like what you find, go elsewhere…this is money YOU will be repaying…not your school. Do not depend too much on the officials at your school. As noted above, their # 1 priority is not always the student.
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