NEWS SCOOP: Loan Company Offers Caribbean Junket to Financial Aid Officers

Six weeks ago, Loan to Learn, a private student loan company, rose to defend the "integrity and intentions of financial aid professionals" accused of receiving cash and in-kind payments for driving students to particular college loan providers.

The company wrote an open letter saying, "It is Loan to Learns (EduCap Inc.) position that these individuals, many of whom have spent their careers looking out for the best interests of students, do not deserve to be attacked as part of a marketing campaign."

In fact, Loan to Learn respects financial aid administrators so much it's offering them a four day, all-expense-paid luxury trip to the Caribbean West Indies. There, and again free of charge, financial aid officers will be educated about Loan to Learn's private student loan products that carry origination fees of up to 10% of principal borrowed and interest rates of up to 16% per year. Click here for a copy of Loan to Learn's offer.

Higher Ed Watch priced the cost of Loan to Learn's Caribbean getaway to more than $3,000. The cheapest room available at the Four Seasons Nevis resort for three nights (that would be "The Mountain Side" room) runs $2,368.35. That's on top of $675 in United Airlines airfare, plus expenses for food and, of course, drinks.

Hopefully, few financial aid officers will be swayed by Loan to Learn's offer. In contrast to Loan to Learn's maximum interest rate of 16% per year, the maximum interest rate on universally available federal Unsubsidized Stafford Loans is 6.8% per year. The maximum interest rate on federal PLUS loans is 8.5% per year.

Seldom, if ever, is a private loan in the best financial interest of students when compared to an unsubsidized federal student loan. In fact, Loan to Learn offers a particularly bad deal, according to this comparative market survey.

Instead of being outraged by the suggestion that they're receiving "payola" and "kickbacks" for funneling student borrowers to particular loan providers, isn't it time for financial aid administrators to back a gift ban comparable to the one imposed on Members of Congress and their staffs?