June 20, 2008
Jefferson City, Mo. - Attorney General Jay Nixon is urging parents and students to remember their rights as borrowers when applying for student loans for the coming college year. Families applying for aid are likely to encounter numerous advertisements for lenders in the mail, at the college office, on the Internet and in many other places.
When shopping for loans, Nixon advises:
"The price of higher education is getting more and more expensive, and families are depending more and more on financial aid," Nixon said. "As the cost of college climbs, it's more critical than ever that students and parents shop aggressively, know their rights and watch out for bad deals."
Students and their parents can use a student loan calculator in the Consumer Corner section of Nixon's Web site at ago.mo.gov. The calculator helps borrowers get a clear understanding of the amount they'll borrow, interest rates, monthly payments and other factors.
The student loan market has undergone significant changes in the past year, due to the softening economy and law enforcement crackdowns by Nixon and other Attorneys General across the country.
After the student loan scandal of 2007, Nixon obtained agreements with nearly 30 colleges, including the University of Missouri system, to implement codes of conduct governing their relationships with student loan companies.
Among other provisions, the codes of conduct forbid schools from receiving any financial incentive for encouraging students to borrow from certain lenders.
Consumers can file complaints against a college or lender by calling Nixon's Consumer Protection Hotline at 1-800-392-8222 or visiting ago.mo.gov.