When The Internet Becomes The Financial Aid Office
March 24, 2021
Last year students and parents have faced unprecedented challenges, and they have looked to college financial aid officers for answers. The question of paying for college can determine a child’s future, and there is one crucial document that can help – an updated lender list.
Many large lenders have left the student loan business due to the challenges of doing business in a difficult year, or perhaps, for other reasons. Meanwhile, small start-ups have introduced new features and benefits, helping to drive down pricing on student loans. The industry is shifting, and it can be hard to discern which new lenders are reputable and place the students’ best interest at the core of their business.
A student loan officer can provide critical guidance that can counter the advertising and marketing tactics of loan providers. These tactics have evolved to be more sophisticated. Digital marketing on Google, Bing, Yahoo!, and other search engines bombard families with ads.
Student loan companies can bid on keywords to get to the top of search engine results. Seeing a company at the top of a Google result can give a false impression that the content is reputable – often, it is an ad.
This unclarity leaves families at the mercy of a Google search, but a thoroughly vetted list of trusted and reputable student loan companies can help level the playing field.
The traditional practice of mailing student loan offers directly to families has expanded significantly. Between the third quarter of 2019 and the same quarter in 2020, more than 130 million direct mail pieces went out across the country.
Families who don’t have financial aid officers to guide them must rely on these mail advertisements to provide education for financing their child’s education.
Another recent change comes from various comparison websites that offer evaluations of student loan lenders. Once more, the families are at the mercy of unvetted information unless a financial aid office can step in to help.
The good news is that creating a lender list is fairly straightforward. We compiled a list of the top ten tips to make this task a little easier for financial aid offices.
10 Tips for Making a Strong Lender List
|Try an RFI||We estimate more than 200 schools build their recommended lender list through an RFI (Request For Information) process. This documented process allows schools to evaluate student loan providers on an equal scale. A simple questionnaire completed by the lenders can allow a financial aid office the ability to choose the right lenders for their students. Issuing an RFI through an association ListServ can provide the perfect distribution avenue.|
|Check the reviews||Using unbiased review sites can provide insight into what consumers think about lenders. With TrustPilot it is easy to search a company’s information and is a good source for unbiased reviews. Simply type in “Trust pilot reviews of ‘insert company name’” and you’ll get back great information.|
|Be aware of referral relationships||Some banks have referral relationships with other student loan providers. By adding them to your list, you’re adding the same student loan provider two or more times and not providing unique choices to families.|
|Keep the list tight||Adding too many options/lenders may not provide families with great guidance. Federal guidance says that schools are required to have a minimum of two unaffiliated lenders on any given list.|
|Check the financial stability and commitment||There have recently been financially strong lenders that have decided to leave the space. Their business models and offering of other types of products allow them to come and go. Also, new start-ups may not have the financial stability to weather the long term. Knowing a provider’s stance on both of these can be crucial to ensuring the right ones are being selected.|
|Price matters||Many long-term lenders have not kept pace with the pricing competitiveness of new entrants. Ensuring that families are getting the best possible deal is one big comparative item.|
|What else do they offer?||Those having financial literacy tools, debt management programs, and unique features and benefits can offer up the best options for families.|
|Do they work within the parameters of your office?||Some lenders and providers work with all third-party entities and others do not. Knowing who can work within the parameters of your office can ensure a smoother process.|
|Use a truly lender-neutral site||Leveraging what ELM and Great Lakes have to offer can ensure your financial aid office is not only providing a truly neutral site, but these are also tools that make it really easy to manage a list without needing internal IT resources.|
|Is the lender in the 21st century?||Much has changed with online technology. More and more students are using their mobile devices. Many student loan providers have offered no innovation In the last decade. Choosing those that have kept up with technology ensures families are being provided with the best choices.|
Earnest is a technology company using technology, data, and design and exceptional service to build more affordable financial products, deliver them to more people, and engage through more human experiences. Founded in 2013 on the belief that financially responsible people deserve better options and access to credit, Earnest’s lending products are built for a new generation seeking to reach life’s milestones. The company’s mission is to empower people with the financial capital they need to live better lives. Earnest is a subsidiary of Navient. Learn more at earnest.com.