College in the Balance: Are Citibank Student Loans A Good Choice For Students?
The cost for a college education is going up every year and will not decrease any time in the near future. Most students have almost become used to the yearly tuition increases imposed by colleges and universities. As a result very few students make it through college without some sort of financial assistance.
Most scholarships and grants fall short of college financial obligations. While tuition may be covered, often the hidden costs, books, room and board are often not part of the package. That is why the federal government and many state governments offer low interest student loans.
Understanding Student Loans
Student loans differ from most other kinds of loans. There are three basic types of loans: loans directly to students, loans to parents of students and private loans. The direct student loans guaranteed by the Federal government are probably the most used resources although many parents prefer the financial obligation be on them.
A student loan, such as Perkins Loan or a Stafford loan is a loan that can charge no higher than about 8% interest. These loans do not start to require payments and accrue interest until six months after the student graduates. Though students are encouraged to pay down the loan while still in school, it is by no means a requirement. This is why student loans are an easy way to finance college and graduate school. But that does not mean there are no risks.
Finding a Lender
While student loans come from federal and state government, the funds are administered by in large by private lending institution. One such institution is Citibank. Citibank student loans are second in number to Sallie Mae, another lending agency that is part of the multi- billion dollar a year industry.
Citibank student loans come with many services to help the person looking to finance their education. They offer a variety of helpful services in order to inform the consumer about what the probable cost will be for their education. They have debt calculators and other research papers on their website that offer an abundance of information for consumers. Citibank student loans have been made considerably more above board following the settlement of a law suit brought by the State of New York against them and several other lenders. This settlement insured that there would be no collusion between colleges and Citibank student loans to sway students toward their services.
New York University was ordered to pay back over one million dollars in monies it received from Citibank student loans for direct service to its students. They were also required to state in large print that students are not required to borrow money from only members of their preferred lender list. In this way, colleges maintain neutrality in the process and put the interests of the students over the interest of the lenders.
By voluntarily settling, Citibank student loans has corrected its behavior and offers a product with more integrity. Self-policing and watchful regulators are insuring consumers that they are getting the best deal they can for their interests.
