There are many private college admissions counselors and private financial aid counselors who do a wonderful job for the students they work with. However, families need to understand that even so called financial aid counselors don’t always know what they are talking about.
Ivywise is a college consulting group known for their high cost and the infamy of having “packaged” the student who was admitted to Harvard and later discovered to have plagiarized a novel she was writing. The Ivywise newsletter has an article written by their financial aid counselor entitled “Secrets from a Financial Aid Officer: Top mistakes students and families make now”. In the article the author states that parents can get a PLUS loan with a current interest rate of 6.1%. However, the current rate for PLUS loans is actually 8.5% and has been at this rate for all loans taken out after July 1, 2006. Prior to that time the interest rate on PLUS loans was 8.02%.
We all make mistakes but anyone familiar with PLUS loans would not suggest that they are currently at such low rates. If families are spending upwards of $40,000 for the services of this group one would expect that their counselors would be familiar with the area in which they counsel students.
Families do not need to spend $40,000 or more to get competent college admissions advice. Spending more does not always get you better knowledge or service.
Financial Aid Counselors who don’t know financial aid
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I don’t know if that condemnation is entirely fair.
I also noticed the mistake in the Ivywise article you’re talking about. In fairness, the 6.1% interest rate on PLUS loans that Rod Bugarin mentioned was based on old information about the 2005-2006 aid year. Though you are correct that it has been fixed at 8.5% since 2006, it seems an easy mistake to make. A lot of websites are reporting incorrect PLUS interest rates simply because they are not up-to-date, and Rod may have been relying on one of these resources during his research.
I do agree, though, that a self-proclaimed financial aid expert should know better and that we should be wary of counselors with out-of-date information (especially when it’s almost 2 years old). An industry expert who earns money for his services should know better.
I e-mailed Rod when I noticed the mistake, and he let me know that he would change it on Monday and also publish a redaction in next month’s issue. He was willing to admit the mistake and to take steps to fix it, so I think we can forgive him on this one.
-Brian, AcceptedToCollege.com