Let me start by saying that there are plenty of people working in financial aid offices across the country who genuinely want to help students and even grads. That being said, the job of a financial aid off is to help students pay for college… not pay off their student loans.
This subtle distinction is huge. They may be well equipped to help you locate student loans, but finding the best repayment plan or best strategy is outside of their wheelhouse.
Where things get dangerous…
As a college student, you may come to view your financial aid office, or certain employees as experts in student finance. This may be justified based upon help that they have provided in the past. If you don’t think you will be able to fund your education and someone helps you find the money to do it, odds are pretty good they will be held in a high regard.
The problem with student loans is that there is no single definitive source of accurate information. This includes your loan servicer, sites like this one, and your financial aid office. There is a ton of fine print and thousands of dollars are at stake. Because of these issues there are many opportunities for mistakes and miscommunications.
One area of student loans with a ton of fine print is public service student loan forgiveness. As you sign up for your federal loans, you may discuss this program. A conversation with your financial aid officer may look like this:
– Financial Aid: One of the reasons we suggest federal loans is that borrowers can get public service student loan forgiveness after 10 years, and for you this could be a great option
– Student: That sounds amazing, are these loans eligible?
– Financial Aid: Yes, all of the federal loans you got are eligible.
– Student: So if I work for the government for 10 years, whatever I haven’t paid off disappears?
– Financial Aid: Exactly!
The problem with this conversation is that while everything the financial aid officer said is accurate, a student relying only on this information could make a huge mistake. Specifically, if they are not signed up for the right repayment plan, those years with the government may not count. This is a very common issue.
Student loans and student loan repayment can be very tricky to deal with. An expert at helping you sign up for student loans may not be an expert at helping you manage your student loans.
A visit with a trusted financial aid advisor might be a useful conversation, but that conversation alone is not enough. Do some research yourself to verify. Talk to your loan servicers to verify. Make sure you understand everything you are told. At the end of the day, it is your money and your budget and it is your responsibility to get it right.