Globe executive: Attacks on our private loans are way off
Globe University / Minnesota School of Business has responded to my reposting yesterday of a Huffington Post article criticizing a private loan program that the schools offer to their students.
The article, written by StudentDebtCrisis.org cofounder Kyle McCarthy, said the Educational Opportunities Loan (EdOp Loan) has been overly aggressive with its late charges, interest (18 percent, he writes) and loan-default conditions.
But Globe Education Network CEO Jeff Myhre writes on the Globe website:
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The recent attacks on our schools alleging unethical lending practices are unsubstantiated and untrue.
He says Globe once offered the EdOp loan to help students with bad credit. The loan was available only to students who had used up all federal student aid and been turned down for a private loan elsewhere.
The interest on the loan varies, but is reduced with consecutive on-time payments and at program completion. Students have the opportunity to reduce interest to zero percent.
Monthly, in-school payments are interest-only ranging from $25-$100, depending on the size of loan
The loan goes into default after 6 months of nonpayment
Student transcripts are withheld only when the loan is in default
No late fees
This year, Myhre says, students have been able to switch to the network's new Student Access Loan program, which started in March. (A Globe spokeswoman told me some students may still hold EdOp loans, but the company no longer offers them.)
The Student Access Loan starts at 8-12 percent interest depending on whether the loan has a cosigner, and Myhre says the interest is eliminated at graduation.
As with the EdOp, new applicants must have used up their federal aid and been rejected for a loan elsewhere. Transcripts are withheld only if the loan is in default, which happens when the borrower has failed to repay after six months.
While enrolled in school, students make monthly, fixed interest payments ranging from $25-$100 depending on the size of loan.
Late payment fees range from $1.15-$5.00 depending on the size of the loan.