53. Private College Loan Perils
A family taking out a $12,000 private loan is paying $5,000 more in interest because the parents aren’t taking 30 minutes to shop and they only complete one application.
—Sue Kim, CEO of Alltuition.com
The director of financial aid at Barnard College became concerned years ago when she was examining figures on the number of students at the women’s college who were obtaining private loans.
Administrators in Barnard’s financial aid office understood why private loans should be a last resort. But the school’s parents didn’t appreciate the potential hazards of a private loan.
Consequently, the school in New York City instituted a policy that requires contacting families who are on the verge of assuming a private loan. ...
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