Ask the boss; disclose

” .. what appears to be an exercise of bad judgment unrelated to the performance of her job ..”

For the record: in all the recent hoopla about The World Bank — prior to his employment by WB, Mr. W. did disclose his relationship to his woman-friend.

Key word: disclosure. As in, tell the boss, you’re getting paid a consulting fee by a vendor.

Then wait for her reaction. Should be less than positive — for obvious reasons.

L.L., at 10:45 am EDT on May 22, 2007

According to the NY Times, Ms. Fishberg and Mr. Charlow were trying to figure out how to refute their kickbacks WHILE RECEIVING KICKBACKS! Give me a break! This is NOT sad! The removal of these FAOs should be seen as long overdue!

Former FAO Director, at 12:15 pm EDT on May 22, 2007

Point not relevant

While T makes a valid, though somewhat naive, point the fact remains that Universities and Colleges can not afford to have their top financial aid officers embroiled in this kind of controversy. Why, you may ask, it’s simple. There are so many federal regulations and so many accreditation issues surrounding higher education that even a hint of impropriety can not be acceptable. These schools did what they had to do to protect the intergrity of their colleges and nothing more.

Martin, at 3:35 pm EDT on May 22, 2007

Stupid? No, quite the opposite

You have to take into consideration that at the undegrad level the debt is pawtry and so are the perks $2625 per freshman doesn’t add up to much. It also sounds nice on the Hill that you support Diect Lending for the young and uneducated. Probably something like this:

Dear President Clinton,

Here at my school we support your new program Direct Lending. I am available to consult for the DOE and I have 20 years experience. Unfortunately I won’t be able to attend the DL conference since I have a conflict, our other lender where we do 90% of our business is taking me out on the town that night. They are also giving me a prominent place on their board and paying for my advanced degree since I’m scoffed at by some since I don’t even have a Masters.

Let’s not forget the real money lies in what graduate students are borrowing— $18,500 federal per (or $40,000 if they are med etc) year and prior to this year a lot in alternative loans. Thankfully there is now the GradPLUS. Now there’s a pot of money any lender with half a brain would be fighting for...Or school, especially if you the school happen to also be the lender and have an agreement to sell your loans in the spring for the kickback. Oh yeah, I’m not supposed to call it a kickback. Shame on me.

The appearance of conflict for most should have been enough to stop them from taking anything. I have friends who do defense contracting and won’t even accept a lunch from the general— when and how did higher education become stupider than the DOD?

I don’t feel sorry for the Directors at all— they were played for all they were worth by their “friends” in lending. What better way to break into the market and gain credibility than to court directors at well know schools who have programs where their kids borrow on average $150,000? We’ll make sure we call him/her an expert, give him/her a title, prominent placement on the board and he’ll/she’ll tell a friend, and they’ll tell two friends... BANG! instant crediilty.

If these Director was such experts in all of this, why could they not figure out on their own that it might be a problem? Maybe all of the titles and compliments proved to be a powerful elixer—most people like to feel important. It wasn’t the lenders crying foul at the My Rich Uncle ad or the Princeton Review— no, they were clever enough to have the schools start screaming. And they did, quite loudly. You were being used and for the life of me, I can’t figure out why you couldn’t see it for what it really was. That’s the part that’s the most pathetic.

Someone please tell me I’m not alone with wanting to cancel my membership to NASFAA since they don’t seem to be bright enough to figure out they’re being used either. For cripes sake: Even the DOE is smart enough to pull a no-show and they’re not very bright.

AN FAO, at 5:55 am EDT on May 23, 2007

MUST — RESIST — LONG-WINDED — IMPULSE...

You don’t give us long-winded types a lot to work with in the way of contribution to the dialogue, but here goes.

There have been plenty of ‘incredibly ethical’ people contributing on both sides of this debate.

About the only things we know about your position is that you seem to think that being opposed to DL is a good thing, and you were very crabby yesterday. Neither of your attributes really have a lot to do with this particular thread, so next time try to stay on topic, and get a little longer-winded yourself.

finaidfollies, at 8:30 am EDT on May 24, 2007

Ann Doherty

I for one would like to get the focus off the big showy bad decisions and debate what is really happening. We have a choice within higher ed lending. All I know is that every student I meet with has no idea when I ask them this simple question: who is your lender? I speak from going on 9 years at my school and spending hours (literally) talking with the kids coming from FFEL schools on average $160,000 and maybe with undergrad loans as well. They have Sub, Unsub, HPSL, LDS, Perkins, alternative loans, institutional loans. They bring their files and boxes and we go through it piece by piece. I’ve seen many of them duped into consolidating at the worst times because they received an official looking flyer in the mail. Annually I have at least one who is on the 268th day heading for default I inherited from another school. Do I think they are stupid kids? Absolutely not.

I know what I knew when I borrowed my loans. My entrance was me and my 150 closest friends in a room and somebody told us it was a loan, borrow only what you need and pay it back quickly. Well that was helpful! My exit I seriously thought someone would talk to me and take the mystery out of it all— all the papers. Nope, it was me and my 150 closest friends in a room hearing the same thing and signing a paper. My only experience going to FA was when I really hit the skids financially. My car was totaled, not paid for and the repair bill was $1600 on top of it. I didn’t even have $18 dollars to pay for the CSS Profile App. I went into the office to ask for $18 bucks and was told I could borrow it. I could also take a little more in a loan. The loan note said check one: pay the interest now or let it capitalize. I asked the FA woman what “capitalize” meant (she was an Associate Director) and she said “can you pay it now?” I was crying and I was too embarassed to ask again because I thought: everyone knows this but me. Needless to say my SLS capitalized quarterly and I could never figure out how to really know what I owed. I look back now and still conclude that was the most useless answer to a question— useless. It had no grace period either and was in arrears. I missed that part during my mass exit as well because all I ever heard was “repayment begins 6 months after you graduate.” Not quite true.... My loan notes said I owed one lender but they had been sold. I didn’t know what a secondary market was. I was also 26 and really embarassed I didn’t know that. What I learned from my FA person has stayed with me to this day: it was my duty to insist she make it clear to me, it was my debt, my burden. To date out of all the interview FA sessions I’ve met 2.5 kids who can tell me what “capitalization” is, my half a kid made it up and he was a finance major. He thought I’d be impressed.

What I know is that giving student borrowers the freedom to ask the question and not get some half baked answer like I received, they appreciate it. They too feel that if they are in college or grad school they should know this already— after all, they’re wicked smaat. The world of educational lending (all the types, all the rules) is rife with confusion. Why make this more difficult to understand— simplify is my main point. One program, 1 lender, 1 payment and one set of rules to follow and limits that make sense. That will never happen given the current state of the profits in lending, ever.

I am not saying lenders are bad, they’re just doing their job and I expect them to. It is unfortunate they find it offensive that I mention the bottom line or what I feel the true motivation is or how they operate. It’s business. If I was in lending, I’d be playing the same game and working all the angles as well.

For the length of the post: I’m a one woman show so this is theraputic for me and I hope enlightening to those reading my posts who don’t work in FA or lending— the average citizen worried about college or someone who borrowed. I think the public deserves to know both sides of the issue and I don’t have the postage budget of Cuomo or a lender to do a mass mailing quite yet. Maybe I should join the kids and make a MySpace page about lending.

marieboston1190@yahoo.com, at 4:40 am EDT on May 25, 2007

Your feedback

I appreciate that FA folks are busy. Community college— no where like it in the world. I would like to think private schools would be better than underfunded public schools or CC’s but that’s not what I see. I have a caseload on aid of 200 or so and a school of 300 give or take. I manage the billing side, I’m the disability coordinator, I’m going to every meeting to represent my school and pretty much every financial transaction for these kids comes through my hands from refunds to loans on down the line. What made a HUGE difference for me was when I decided I would meet with my kids one on one to do their FAFSA’s in the spring. Everyone I’ve ever said that to who works in the same type program has said: you have a small school, you can do that. If I could eliminate some of the other things I do, I could probably manage about 400. I realize the average caseload may be 600 or more which I think is an absurd number if your school really wants you to counsel (if you are a Dean, 600 is way too may—trust me on that. Chop it to 400 and let your FA folks counsel instead of chase paper and I promise you, your students will be really happy) especially at the grad level if they are there for a few years. My logic was “you can pay me to chase you down, collect papers and make corrections to an application I know you will just screw up or you can pay me to counsel you; it’s your choice how I run this operation.” I can do a FAFSA, collect all the taxes etc in less than 15 minutes per kid. I can’t tell you how many times I’ve said to a kid “you didn’t take your tax credit or your parent didn’t,” they miss it all the time. I go over the budget, point out the shortfalls, give them a best case/worst case scenario so they are not freaking about money and waiting for the “magical award letter” to tell them they can afford to return. The amount of time that freed up during the rest of the year was unbelievable and the amount of stress they did not have was even more unbelievable. I’m lucky— have the best FA job in the country— I do what I was hired to do: be a counselor and I am thankful everyday. I also have the best DFA on the planet who let me revolutionalize her office and give it a try my way (it’s what I wanted when I went to CC and undergrad and I’m certain my DFA thought I was nuts at first). I don’t work in a processing plant behind velvet ropes (I interviewed at one of those once and declined the offer). Deans and the other powers that be should realize that the number of complaints about FA would be really low if you restructured your office this way if you can. I’m not seeing this working at a school with a transient population like CC but it could at a lot of others.

I have yet to get a call from a kid who is having trouble in repayment, even after 9 years and they all have typically the highest debt of any students bar none and the most convoluted porfolios known to man before they actually get a job. They also get my home phone number in case they do).

Do I think after all that they would want a 1 lender/1 loan/1 set of rules system? Yes, even if it may cost them a bit more but I tend to think it would cost less across the board for all students if the profit margins were removed. DL is not the cadillac of lending— it’s clunky, outdated in some areas and the publications are not very pretty. What I like about it is the fact you can’t lose a loan you owe the government (DL) but you can if it’s with a lender. I think the maze of lenders, servicers, GA’s, marketers, consolidation referers, loan recommenders and the other industrys erupting out of this controversy (and they are) is just going to add to the confusion. Your school may use a certain lender for 4 years but someone else’s school has a different partner. Perhaps it is I who is the stupid one because I just don’t get the logic of it all. I have only 2 graduating kids who consolidated with the graduate consolidation company who will not be named and both have decided to go back to DL— why? They like the security of an income contingent repayment plan of all things. They are entering one of the highest paying professions in the country. I swear I’m in the twilight zone lately.

Ann Doherty, at 10:15 am EDT on May 26, 2007