New York Attorney General Andrew Cuomo is preparing a lawsuit against Goal Financial, the student loan company that also runs the website eStudentLoan.com. According to the New York Times, Goal Financial stands accused of misleading consumers about loans, and offering them gifts such as iPods to influence their choice in lenders. While other lenders accused of dishonest practices have repented and agreed to follow a code of conduct outlined by Cuomo, Goal Financial has not, hence the pending lawsuit.
Goal is accused of misrepresenting loan terms to promote private loans over low-interest federal Stafford loans, as well as failing to disclose their ownership of eStudentLoan on the latter's website. The company also allegedly failed to disclose that all lenders listed on the eStudentLoan loan rate comparison feature were companies that had paid a commission to Goal Financial.
While Cuomo's investigation of the student lending industry has undoubtedly made borrowing less risky, students should still proceed with caution and carefully vet the quality of the lender they choose to use. If you need to take out student loans to help fund your education, be sure to do your research. First and foremost, explore all federal student financial aid opportunities. Start by completing the FAFSA on the Web and visiting with your school's financial aid office. It would also be beneficial to conduct an extensive scholarship search at this point, as well, since you never know where you might find money for college.
If you do find you need to borrow a private loan, research several lenders, and if your college's financial aid office maintains a preferred lender list (which should consist of lenders that are actually preferable thanks to Cuomo's earlier investigations) take a copy. Begin evaluating your options, but be wary of anything that sounds gimmicky or too good to be true. Carefully research any loan before you apply.
Find out which banks have the best rates and repayment options, and whether you'll need a cosigner to get approved. Apply to one loan at a time and give yourself plenty of time for processing, since many student loans need to be approved by the bank and certified by your college before funds can be disbursed. Many lenders will let you know within a day or two whether your has been pre-approved or rejected so that you can move on to the next application if necessary.