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Private Lender Accused of Misleading Students

Like many lenders that offer private loans to students, Loan to Learn has benefited greatly from a boom in which such loans have seen their share of the market grow to 18 percent of all student loans and about 10 percent of all student aid awarded -'" a total of $13.8 billion in 2004-5.

Like many lenders that offer private loans to students, Loan to Learn has benefited greatly from a boom in which such loans have seen their share of the market grow to 18 percent of all student loans and about 10 percent of all student aid awarded -'" a total of $13.8 billion in 2004-5.

In a complaint filed last week with the Federal Trade Commission, the United States Student Association charges that Loan to Learn and its parent company, EduCap, Inc., have built their successful business in part by engaging in "false and deceptive advertising practices" in its marketing and advertising materials that are designed to "discourage customers from applying for federal grant and loan aid, and to make the company's loans appear to be a preferable alternative."

Another paper presented at this week's AEI conference, by Richard Lee Colvin of the Hechinger Institute at Columbia University's Teachers College, says that Loan to Learn charges some students interest rates of up to 19.37 percent.

This article appeared in the September 28, 2006 edition of the Inside Higher Ed.

Published Monday, Oct. 2, 2006

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Private Lender Accused of Misleading Students

Like many lenders that offer private loans to students, Loan to Learn has benefited greatly from a boom in which such loans have seen their share of the market grow to 18 percent of all student loans and about 10 percent of all student aid awarded -'" a total of $13.8 billion in 2004-5.

In a complaint filed last week with the Federal Trade Commission, the United States Student Association charges that Loan to Learn and its parent company, EduCap, Inc., have built their successful business in part by engaging in "false and deceptive advertising practices" in its marketing and advertising materials that are designed to "discourage customers from applying for federal grant and loan aid, and to make the company's loans appear to be a preferable alternative."

Another paper presented at this week's AEI conference, by Richard Lee Colvin of the Hechinger Institute at Columbia University's Teachers College, says that Loan to Learn charges some students interest rates of up to 19.37 percent.

This article appeared in the September 28, 2006 edition of the Inside Higher Ed.

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