Colleges launch Web loan tool

By Julie Carr Smyth

COLUMBUS, Ohio — Private, nonprofit colleges in Ohio and 11 other states have launched a new Web tool to help students find private loans for school.

C. Todd Jones, an Ohio official who helped develop the website called The Marketplace, said students can find it daunting to shop for bank or credit union loans needed to fill the gap between government grants or scholarships and the cost of attending college.

“The big difference in this is that it will now allow a transparent marketplace where students can find out how much they are going to be charged for their loan before they make a loan application, and they won’t have their credit rating dinged five times,” said Jones, president of the Association of Independent Colleges & Universities of Ohio.

Jones said The Marketplace service saves lenders overhead costs so they’re able to eliminate fees and markups that can surprise student borrowers.

The online loan comparison and shopping service is operating in Ohio, California, Maryland, Oregon, Pennsylvania, New York, Indiana, Michigan, Kentucky, Mississippi, Tennessee and Alabama.

According to the College Board, a membership organization of colleges and universities, private loan volume hit $24 billion in constant dollars during the 2007-08 school year — making up about a quarter of all college borrowing — then declined by 50 percent the next year.

Before the web portal was available, students were left to navigate dozens of financial institution websites to compare loan terms, said Dawn Knepper, director of financial aid at the University of Rio Grande and Rio Grande Community College. She’s referred hundreds of Ohio students to the website this year, she said.

Sarah Matthew, a student at Duquesne University in Pittsburgh, said the private loan she secured through The Marketplace made it possible for her to attend an accelerated second-degree nursing program at the private Catholic school.

“It was very difficult to get a loan,” said Matthew, of West Virginia. “I’m 27 years old, I’ve never had a student loan before so I really don’t have much of a credit history to go on. You really don’t think about that all through college, how your credit rate looks.”