The Federal Student Loans Are Worse Than Casinos

The Marketing Advantage of Federal Student Loans over Private Loans

I have to get this one out and it keeps on bothering me.

The financial aid package I received from the college my son intends to attend, has two pages. The second page is a signature page.

On the first page, it states, plainly:

SELF HELP OPTIONS for 2013-14

 

Accept/Decline

Federal Direct Unsub Staff Loan

5,500

YES/NO

Federal Direct Plus Loan

19,150

YES/NO

 

Then its goes on in smaller-fonts with these verbages:

*Federal Student Loans* If you wish to borrow from the federal loan program go to www.studentloans.gov to complete entrance counseling and the Master Promissory Note to meet the requirements needed for the loan to be proceed.

*Federal Direct Parent Plus Loan* If you wish to borrow from the federal loan program go to www.studentloans.gov to complete entrance counseling and the Master Promissory Note to meet the requirements needed for the loan to be proceed.

That is, no more explanations, no important details such as mentioning of interest, terms of the loan. And no other alternatives, such as private loans and home equity loans are mentioned .  I guess for those one will find eventually.

I just could not believe the brief and casual manner the information was presented to us. The school is asking us to fund an education without knowing it will pay off, it is like show me the way to a casino, or enter a online casino website, except a real casino will have signs say that it is a casino, and online casino will try to make sure one is 18 years old or otherwise legal to gamble.

But the offer letter does not.

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