A government office released a report questioning a federal mandate which said the Department of Education should create a loan comparison website for college students.
In the report released by the Government Accountability Office, investigators scrutinized the need for the Department of Education to create a tool on its website that would assist students in comparing interest rates and information regarding federal and private loans.
According to the report, the creation of this national clearinghouse for student loans has been mandated by the Higher Education Opportunity Act.
Results from the report found creating a tool on the Education Department’s website would be feasible, but the need for it remained questionable.
There are already several web-based loan comparison tools available to students, the report said.
Wisconsin Center for the Advancement of Postsecondary Education Director Noel Radomski said many universities already have websites detailing loan opportunities.
In addition, he said he believes the mandate is built on speculation of a potential problem facing students.
Radomski said he has not seen evidence students are having problems finding loans.
Rather, he said, funding for developing the program might be better used toward altering real problems students face today, such as high tuition rates.
The report also explored the dilemma of how to provide accurate information to different students nationally.
UW’s Associate Director of Student Financial Aid Michelle Curtis said there are so many variables that come into play with loans that it may be difficult for the website to provide accurate information.
The conditions of loan interest rates vary from person to person depending on factors such as credit score and the graduation rate of the school’s students attend, Curtis said.
“There are too many variables to say that a student should borrow from lender ‘a’ versus lender ‘b’,” Curtis said.
The report also states many lenders would not be willing to participate in the website.
Curtis said the lack of lenders appearing on the website may lead to the presentation of inaccurate information and may make students feel misled.
“There were enough yellow flags that came up to say that it may not be the best approach,” Radomski said.
