Local business helps link students to loan deals
September 13, 2010 (WLS) -- Some local entrepreneurs are trying to take the guesswork out of finding a student loan.
More and more students have to turn to private student loans to make ends meet in college.
"I just needed money to get my books and my computer that I needed to start grad school," said student Justine Shaw.
After a decade of college and grad school, Shaw is no stranger to student loans. Now, in order to get her PhD, she has had to take out a private loan.
"You have a lot on your mind, and then to have a financial burden placed on your back, you just want to get your loan check ASAP," said Shaw.
Students all over Chicagoland are worried about paying for college.
"It is a huge, huge number of students that are having trouble understanding what their options are," said Chicago entrepreneur Sue Khim.
Khim created EduLender, an online marketplace to help compare private student loans.
"How can we just make this whole financial marketplace, and this mess, easier to navigate for students and parents, and we just want to make it fair," said Khim.
EduLender takes basic info like where you want to go to school, how much money you need to take out, and how long you want to pay it back.
"We just try to make it really easy," said Khim.
Then, the site then shows every loan that matches your criteria and lets you compare the rates side-by-side.
Instead of charging lenders to appear on the site, the site stays neutral by showing results randomly.
"We read all of the fine print and re-compute a rate that is actually comparable between the different lenders," said Silas Hundt of EduLender. "All of your options are there, and all of your options are clear."
"I think just like any loan, if you're getting a mortgage, if you're getting a car loan you want to check out all your options," said DePaul University Associate Vice President for Financial Aid Paula Luff.
Luff says before students turn to private loans they need to make sure they've exhausted all other federal, state and university options.
"More students are feeling the pressures of not being able to make ends meet, even families who in the past felt like they could write the check, sort of, aren't feeling that way anymore," said Luff.
Shaw wishes that when she took out her private loans she had a tool that could have helped her compare rates.
"It would have made my choice a lot easier because I could have just whipped out my laptop in the office and pulled up the site and made more of an informed choice, because my choice was not very informed," said Shaw.
Lenders do pay EduLender a "finders fee" for loans completed through the site, but the site's operators say their process stays fair because all loans are displayed equally.
However, before turning to a private student loan, all options with the institution's financial aid office should be considered.
consumer, cheryl burton
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