Tuesday, April 10, 2007

Full Disclosure

I'm scheduled to speak about "Generation Debt" at the University of Wisconsin-Milwaukee tomorrow. UWM, it emerges, it emerges, is the single school that handled the largest volume of federal student loans from Student Loan Xpress, the company now under scrutiny by the Attorney General's office. $72.4 million, as their sole preferred lender for a few years. Their financial aid director, Jane Hojan-Clark, is one of several who have been placed on leave CORRECTION: SHE WAS NOT PLACED ON LEAVE AFTER ALL. She didn't get tens of thousands in stock options; she did sit on an advisory board and get free trips to Ohio and New York.

Here's the thing. Obviously, I get paid for these appearances at colleges. And part of the money that pays me comes from tuition. And part of that money comes from student loans. I even got paid last fall to appear at a conference sponsored by a nonprofit student loan servicer who, I think, is one of the good guys. But never has the irony been so obvious. Even as I do my best to remain independent in outlook and bring a message that will help students, I'm part of the system, too.


Anonymous said...

Before you express support for the STAR Act at UWM, I suggest you do the math.

If UMW switched to direct loans, assuming 2/3 of the undergrads borrow on average about $3,000, UMW would receive additional Pell Grant funds at the rate of 1/2 of $3 per $100 in loans (or 1.5%).

That comes to about $640,000.

On the other hand, borrowers at UMW would now be responsible for at least 2 percent in Direct Loan origination fees, charged up front when the loan is made.

That comes to $851,000 in higher loan costs for UMW students, just counting the fees.

It looks like borrowers are funding the STAR Act. Now, why again do you support the STAR Act?

Anya said...

It's funny how the only people who claim Direct Loans are more expensive are either anonymous, or employees of lenders.
Direct Loans save taxpayers money. Taxpayer money is the source of federal tuition grants. It's that simple. "Discounts" offered by lenders come out of federal subsidies, and that's a fool's bargain.

Anonymous said...

Quick clarification: UWM Financial Aid Director Jane Hojan-Clark has NOT been placed on leave. And the *free trips to Ohio and New York* were to attend relevant financial aid conferences.

Anonymous said...

It's funny how people who think direct loans are cheaper never respond to the merits.

Anonymous said...

You may want to do some research on American Student Assistance (ASA). They are a guarantor for FFELP loans and appear to have a quite a checkered past. Check out this link: