Paradise Lost

EduCap announced that its controversial all-expense paid conference in the Caribbean for financial aid officers is cancelled. My guess, though, is that this is not the last we’ll hear about this issue. While lending companies vigorously deny using inducements to gain that coveted status of ‘preferred lender’, economics tells us that thinly veiled efforts like EduCap’s to get on the preferred lender list are likely to increase.

Inside Higher Ed provides a great overview of this issue – the rising tuition, declining grant aid, and increases in loans, especially private loans (the types of loans EduCap gives), which don’t have the protections for borrowers that federal loans do.

What this information tells us is that the stakes are getting higher. There’s more money to be made now than ever before in student lending. Instead of relying on companies to decide what is or is not appropriate, or on financial aid officers to demurely resist any offers of free vacations, we need to establish a system that truly works for and protects students. That system will necessarily include a better definition of the role of financial aid officers and more clearly defined regulations on what lending companies can offer and do to promote their products.