MHEC offers informative guide on
ANNAPOLIS--(January 4, 2008)
Unsavory student loan programs which put students seeking
degrees of higher education at risk was one of the most
controversial and disappointing stories of 2007.
To ensure students don’t fall into the trap of taking out
ill-advised or unnecessary student loans, the Maryland Higher
Education Commission offers a valuable pamphlet to guide
Maryland students seeking private loans for their education.
Recent MHEC research shows that 45% of Maryland students rely on
private student loans to help meet their tuition payments.
The pamphlet, “MHEC’s Guide to Understanding Private
[Alternative] Student Loans” is currently available for students
and parents seeking help to fund their post-secondary education.
“The student loan industry is for the most part reliable and
reasonable,” Higher Education Secretary James E. Lyons, Sr.,
“However, as we learned this year and in past years, some
lenders take advantage of those seeking to fund their higher
education. This is most unfortunate.”
“MHEC’s Guide to Understanding Private [Alternative] Students
Loans” provides information about what exactly are private
loans, what the relationship is between a school and a private
lender, and how much a private student loan really costs in the
In fact, it provides a useful table on what a private student
loan costs when origination fees and interest accumulation are
added to the original loan amount.
MHEC’s brochure takes would-be applicants for private student
loans through the often complicated process.
For instance, it lays out things to consider when determining if
a private student loan is right for loanees. Among the
If possible, shop around for loan terms.
Completely read and understand the contract before you sign
Ask questions before you sign it. DON’T BE SHY.
Understand what may happen should you default on a loan.
If you default on a private student loan it may harm your credit
rating; may harm your co-signer’s (if you have one) credit
rating; may harm your ability to obtain future credit (for cars,
appliances, other student loans, homes, etc.); there’s a
possibility you may get sued for the entire amount of loan,
payable immediately; or you may be held liable for the costs
associated with collecting your loan, including court costs and
The guide also provides information about how private student
loans differ from federal student loans and brief information on
Federal Financial Aid (Title IV) loans including:
To find the brochure on private student loans, go to
www.mhec.state.md.us and access the Career and Workforce
Education link, then Private Career Schools.