With a new semester about to begin, students at The University of Texas at Austin are again receiving emails promoting search engines and Internet portals for private student loans. The wording of some emails, including references to a "student loan summary for University of Texas at Austin," may suggest that they have been sent by the university. That suggestion may be misleading.
The emails in question do not come from the university. Instead, they originate with private companies that advertise student loans on behalf of for-profit lenders. In fact, the university does not recommend, promote or endorse any private lenders or their student loans. Furthermore, the lenders listed do not provide the only loan options for UT Austin students.
The Office of Student Financial Services (OSFS) strongly recommends that students complete the Free Application for Federal Student Aid (FAFSA) so that their eligibility for other forms of financial aid may be evaluated. OSFS urges students to exhaust grant, scholarship and federal loan eligibility before considering private student loans, which often have variable interest rates and other terms and conditions that make them more costly for students.
If students decide to pursue private student loans, OSFS will certify their enrollment and cost of attendance as required by their lenders. But they need to know that the interest rates, terms and conditions on private student loans vary greatly.
Students should conduct their own independent research before selecting any loan. Most of all, they should carefully consider the candor and trustworthiness of the lenders they are considering, and of the business partners those lenders hire to sell their products because loans create business relationships that affect students for years to come.