If you had asked me many moons ago if I thought removing or limiting a school’s preferred lender list would work in the world of student loans and financial aid, I would have laughed you right out of my office. The preferred lender list, in its inception was a great tool designed to assist financial aid officers with the cumbersome process of handling hundreds of different loans from different sources with different processing requirements. Financial Aid Officers were burdened with ensuring that each loan got processed, then had to keep track of several different deposits and finally deal with paper checks that then had to be deposited in student accounts. All of this would cause major delays for students and often resulted in them having registration problems in the following semester due to past due balances.Â
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I do not think that financial aid officers, students or lenders and guarantors, for that matter, are eager to return to that model. That being said, it is 2007 and it is a different time for schools and students. The worries of accepting paper checks or even paper applications for that matter are not as relevant as they once were. Fears of living in a bogged down paper environment are not taking into account the great strides in technology we have all made in this industry.  As such all of those participating in the distribution of and managing of student loans have many more electronic options for communicating important data and applying for loans and other federal and non federal aid than the did before the preferred lender list.Â
In this ever changing environment for student financial aid administrators, lenders, guarantors and servicers alike, the preferred lender list has become a complicated implication of a bigger problem in corporate America. But that is for an editorial on another day. My point is that regardless of how we fight it. The preferred lender list is going to change and the way financial aid administrators do their job is going to change. The same way students seek loan information is going to change. How we as a community respond is what makes the difference. Helping students find the best options available should still be our ultimate goal.Â
 An interesting thought occurred to me while attending a session at the EASFAA conference this past week. An audience member expressed concern that she would no longer be able to walk her students through finding the best loan for them. And it got me to thinking; at what point do we look to students and their families to take some of the responsibility for becoming more educated consumers. Look, I know there is perhaps no more complicated process out there than the student financing industry, that being said, the mortgage process is no picnic either. But younger and younger American’s seeking home ownership and educating them on how to do it in the process becaue they see value in understanding it. If we place no importance on the process of selecting your own financing options, how will they ever see the value in it?Â
Perhaps this is the new approach we should take when it comes to student loans. After all, what bigger investment does one make in one’s life than in their education? A graduate education and beyond can cost into the hundreds of thousands of dollars, that is more than what some homes cost (although not in Massachusetts!). The point is, maybe it is time we let go a little bit. If the process doesn’t become that much more burdensome for the administrators, maybe it is time to education students at an earlier age about how to research and find the best financing options for them. With good intentions, we may be doing them a disservice by sheltering them from the harsh realities of things like predatory lending practices and reading the fine print.Â
 The fear for financial aid officers is that by losing some of the control over who students borrow through, they are going to end up with higher rate loans with little to no borrower benefits. Granted this is a possibility, as long as students remain ignorant about the process. Let’s face it students sit through entrance and exit interviews thinking about things other than what we are telling them. They don’t take the process seriously because they don’t participate in the most important part of it; applying for it.Â
I have thrown the suggested for many years now that colleges should implement, as a freshman requirement, a financial literacy program that students must pass before they both move onto the sophomore grade but also receive more federal student and other loans. I believe it would be in the best interest of the student, the school and the United States Economy as a whole. Okay, I am stretching it a bit, but think about it. We would not have a population of graduating students who are overwhelmed by not only their student loan debt, but the enormous amounts of credit card debt we are seeing younger and younger students take on.Â
 I think that it is time students start to take responsibility for these researching and managing their loans much sooner in the process than in repayment. Having worked in claims and bankruptcy unit for ASA, many times I’ve heard defaulted borrowers say “Gee I never even realized I was taking this much money.†Or, “I didn’t realize that I would have to pay this entire loan back!â€Â Things like preferred lender lists and serial MPN’s don’t help this situation either.Â
I think that this attitude is do to the fact that historically we have taken them out of the decision making process. Again, I don’t think that was the intention of the preferred lender list but I think it was a result of it.Â
 I think we are at a cross roads here. Let’s use this changing environment as an opportunity to empower our students to become responsible consumers. Here at the Student Loan Network, we know how important that is. It is why we take our responsibility as one of the leaders in internet student loans so seriously. We understand that we have tremendous responsibility to provide accurate, easy to understand information to help students create a college financing package that they understand, can manage and that will help them achieve their educational goals. visit our site at www.studentloannetwork.com to see how we communicate to our students and families. Â
 Change is never fun. But it is inevitable and always provides opportunity for growth, improvement and innovation. Whether we see it as good or bad, helpful or cumbersome, is inevitable. Think MPN when it was first introduced. Remember all the grumbling of “how in the world are we going to…†well we managed. The same way we will manage in this new world.
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