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"Cash is king," continues to ring true in this economic climate. However, the fact remains that the majority of college students will graduate with some type of debt because escalating tuitions continue to outpace a family's ability to save. In light of the millions seeking higher education over the past few years, banks and other lenders eagerly embraced the student loan market. It's currently a healthy $8.5 billion industry and these numbers stimulated the greed factor for both lenders and those that "steer" students to them.

However, the good news is that in May 2008, a new federal law passed that prohibits deceptive practices and establishes a students' "bill of rights." As a result of the NYS Attorney General Andrew Cuomo's nationwide investigation, it was revealed that improper payments and perks were being paid to colleges and to financial aid officers in return for a "good word," or placement on the schools' "preferred lender" lists. In a recent presentation held at Schreiber, a representative from Mr. Cuomo's office distributed material concerning the new legislation and played an educational DVD that discussed funding options. Free copies are available to all by visiting www.oag.state.ny.us. The presentation is the latest talk in Cuomo's statewide Student Loan Education Initiative, a groundbreaking statewide educational program alerting students to pitfalls and new protections regarding the student loan industry.

Although the entire process is time consuming, all non-borrowing options such as scholarships and grants should be explored. For example, in early 2009, information about community scholarships will be posted and distributed. All Schreiber students are eligible to apply and family income isn't necessarily a deterrent or an advantage.

In early January, students seeking financial aid from either the federal or state government need to file the FAFSA form that may be completed online. All colleges require this prior to even talking about financial aid packages. In order to save time, it's best to gather the information needed to complete the form such as Social Security numbers and copies of the past two years' tax returns.

It's important to realize that a student's credit may be jeopardized if timely payments aren't made and that once interest is calculated, the "payback" may be three or four times the amount borrowed. Unfortunately, the loans are very serious financial commitments and mortgaging future earnings can't be taken lightly. There aren't federal bailouts for students who either don't understand the obligations or fail to meet them.

Hank Hardy, chair of Schreiber's Guidance Department, and Kay Prainito, chair of Hofstra's Financial Aid Office, led a presentation for parents seeking education about college loans. Mr. Hardy commented, "Before taking that step and finalizing the college loan process, it is important for families to research the different loan programs, the terms and conditions of the loan, and their own financial situation. When a question arises, families can always contact the financial aid officer of a local college, visit the available websites, and/or contact our guidance office."


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