An education beyond high school is an investment in your future. It can be expensive and often requires you or your family to take out loans to help pay for it.
Student loans fall into two categories, federal loans and private loans.
Whether you’re taking out a new student loan or consolidating existing education loans, the Federal Trade Commission (FTC), the nation’s consumer protection agency, and the U.S. Department of Education (ED), the agency that oversees federal student loans, want you to know how to spot potentially deceptive claims or business practices some private companies may use to get your loan business.
Private companies may offer you loans and other forms of financial assistance for your education. They often use direct mail marketing, telemarketing, television, radio, and online advertising to promote their products.
Paying for your education is a serious long-term financial obligation; that’s why comparing the costs of different ways of financing your education is so important. Private loans tend to have higher fees and interest rates than federal government loans. Private loans also do not offer the opportunities for cancel-lation or loan forgiveness that are available on many federal loan programs. So it makes good financial sense to exhaust your federal loan options (as well as grants and scholarships) before considering loans from any private companies. To learn more about federal government loans, visit www.FederalStudentAid.ed.gov….
If you are considering a private student loan, it’s important to know whom you’re doing business with and the terms of the loan. The FTC and ED offer these tips to help you recognize questionable claims and practices related to private student loans.
Student loan consolidation is combining several loans into one with a new repayment term and inter-est rate. This is generally offered in connection with federal loans. Here’s how to help identify potential problems related to loan consolidation:
Whether or not you have a targeted timeframe, take your time to determine whether consolidating is right for you.
Department of Education at:
U.S. Department of Education
Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044-0084 800-4-FED-AID (TTY: 800-730-8913)
Notify the Federal Student Aid Ombudsman at 1-877-557-2575 or www.ombudsman.ed.gov… if you have a complaint that you cannot resolve with your lender.
For questions about a particular lender, contact
the federal agency with jurisdiction over that lender:
Office of the Comptroller of the Currency
Regulates banks with “national” in the name or “N.A.” after the name:
Office of the Ombudsman
Customer Assistance Group
1301 McKinney Street, Suite 3450
Houston, TX 77010
Board of Governors of the Federal Reserve System
Regulates state-chartered banks that are members of the Federal Reserve System, bank holding companies, and branches of foreign banks:
Federal Reserve Consumer Help
PO Box 1200
Minneapolis, MN 55480 888-851-1920 (TTY: 877-766-8533) toll-free [email protected]
Federal Deposit Insurance Corporation
Regulates state-chartered banks that are not members of the Federal Reserve System:
Division of Supervision & Consumer Protection 550 17th Street, NW Washington, DC 20429 877-ASK-FDIC (275-3342) toll-free
National Credit Union Administration
Regulates federally chartered credit unions:
Office of Public and Congressional Affairs
1775 Duke Street
Alexandria, VA 22314-3428
Office of Thrift Supervision
Regulates federal savings and loan associations and federal savings banks:
Consumer Programs 1700 G Street, NW Washington, DC 20552 800-842-6929 toll-free www.ots.treas.gov…
Federal Trade Commission
Regulates non-bank lenders:
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 20580
877-FTC-HELP (382-4357) toll-free
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business prac-tices in the marketplace and to provide informa-tion to help consumers spot, stop, and avoid them. To file a complaint or to get free infor-mation on consumer issues, visit ftc.gov… or call toll-free, 1-877-FTC-HELP (382-4357); TTY: 1-866-653-4261. The FTC enters Internet, tele-marketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Federal Student Aid, an office of the U.S.Department of Education, administers the federal student financial aid — grants, loans, and work-study programs — available for education beyond high school. Federal Student Aid interacts with postsecondary schools, financial institutions and other participants in the student aid programs to deliver services that help students and families plan and pay for college.
To learn more about Federal Student Aid and how to pay for college, visit www.FederalStudentAid.ed.gov… or call 1-800-4-FED-AID.
The Federal Student Aid Ombudsman is available to individuals with specific complaints. To learn more about the Ombudsman, visit www.ombudsman.ed.gov… or call 1-877-557-2575.