FAFSA Loan - The Truth About FAFSA Loans: FAFSA Stafford Loans,
FAFSA PLUS Loans and FAFSA Consolidation Loans

	Enter your search terms Submit search form
	Web www.FAFSALoan.com

Cost of Attendance

We'd use the award letter information if available otherwise figure out how much they would need to borrow.

From that we'd estimate the monthly loan payment, based on a 10 year term at the current rates. We'd tell them that they may be able to extend the term up to 30 years depending on the loan amount, and thus reduce their payments. This would be if they chose to do a consolidation loan at some time in the future. Also, there is no prepayment penalty.

Loan Repayment Incentives

We'd offer additional discounts on the college loans. They were

• Quarter percent reduction with automatic debit of the payments from a bank account
• after 48 on time payments, Plus: 1% rebate, Stafford 2% rate reduction

These were pretty standard throughout the FFEL college loan industry.

PLUS vs. OTHER OPTIONS

We'd ask whether they had any other options for paying for college. This was in order to eliminate the competition from those other options. At the time I was working in the industry, the biggie was home equity loans as they were almost at the same low interest rate as the education loans.

• Paying out of pocket
• Cashing in savings or investments
• Borrowing against their home

We'd ask "which option would you most likely choose?"

With home equity and other adjustable interest rates now much higher, the interest rate capped Government education loans must be looking more attractive.

PLUS Loan QUALIFICATION

We'd establish if in the past 5 years the prospect had any bankruptcies, foreclosures, tax liens or if they currently have any accounts past due over 90 days.

If yes, we'd try to establish if they had a credit-worthy co-signer.

CLOSE

Plus Pre-approval

This was the big one for the educational loan counselor, as we would get paid for getting the prospect to the credit check stage. Not all schools had this online credit check, but most did. If they chose not to have credit checked online: we'd send them a pre-approval form.

We'd offer a free PLUS credit pre-approval service "which will allow you to make sure all your bases are covered without committing you to accepting the loan. Then, if you decide to use the PLUS loan when its time to pay for school, you will know in advance that, unless you have an adverse credit situation arise after the pre-approval, the funds are going to be available to you.  As there can frequently be unexpected delays with the Federal Financial Aid process, you should get this safety net in place now."

Note all the creation of uncertainty: "bases covered", "adverse credit situation", "unexpected delays", "safety net". The guys who wrote this knew what they were doing.

Getting the social security number to do the check was the "YES" moment for most of the college loan counselors.

Locking in the borrower

We would then try to lock them in in a number of ways, by confirming that “I will be assigned as your student loan counselor from this point forward. That means I will be available personally to help you throughout your/ your families years at college.”

Looking back at it, this is a bit of a beef of mine with the company, as there was a pretty high turnover usually with people leaving during the slow period for college loans (October through March) and the company was very resistant to the idea of allowing people, even good people, to work seasonally. So a promise to look after someone through their years of college was pretty baseless. Other than that, the company was very ethical and adhered to very high standards of customer service.

For those who did the online credit pre-approval, we'd mention the repayment incentives that will end up saving them some money should they decide to use the PLUS loan. To make sure they'd receive these incentives we'd tell them that it is important that they give us a call as soon as they receive the award letter.

Importantly, we'd tell them to "keep in mind that you have already been credit pre-approved" with us. "It is important to note that should you choose another lender another credit check would be pulled. To avoid this you will need our lender information for the school paperwork you will receive."

We didn't want the loan being screwed up by the school using some sort of preferred lender arrangement on the forms it sent the students.

We'd emphasis our expertise in easing and simplifying the entire Financial Aid process, and that our job is to help secure these benefits as quickly and effortlessly as possible. There were counselors available 24 hours a day, seven days a week "in case you have any last minute emergencies.”

We'd also have one last shot at asking if a parent had any other children that are attending college or that will be in the future?

	Enter your search terms Submit search form
	Web www.FAFSALoan.com

Tell A Friend About The FAFSA Loans Web Site

Use This Link To Send To A Friend