FROM: Dr. Philip Day, President and CEO

DATE: May 23, 2008

RE: Raising Public Awareness On Deceptive Direct-To-Consumer Marketing

Dear Colleague,

As the height of the lending season fast approaches, a handful of unscrupulous student loan providers are up to their old tricks: providing misleading information in direct-to-consumer marketing campaigns in the hopes of increasing their loan volume. I want to take this opportunity to update you on the actions NASFAA is taking to address this troubling practice.

Some of these ads portray financial aid administrators in a very offensive way, but the far worse crime is the damage they do to students. If we react with outrage to the personal attacks on our profession, we only draw attention and provide media exposure to these direct-to-consumer marketers, which is precisely what they want.

Similarly, engaging these companies in public-forum debates only furthers their goals of getting their name out to the public, free of charge. In some cases, companies may intentionally provoke us in order to create a nonexistent controversy that attracts publicity to their company. NASFAA will not fall into that trap.

We will, however, oppose on every level the ultimate harm done to students and families by advertisements that intentionally cause families to distrust the financial aid office. Families can all too easily be misled into borrowing expensive private loans before exhausting federal financial aid options, or may be talked into borrowing more than they need. In addition, students who bypass the financial aid office due to direct-to-consumer marketing may miss out on state, local, and institutional aid. This is the message that deserves the full media spotlight.

The negative impact of misleading or inaccurate direct-to-consumer marketing is a serious problem for students. Low-income families are especially vulnerable to such predatory marketing because they are less likely to have the financial experience and knowledge to recognize this misinformation.

NASFAA is committed to raising public awareness of the deceptive practices of direct-to-consumer lenders who try to steer students away from the aid office. We are taking the following steps to address this issue.

• As NASFAA's President and CEO, I am personally contacting leaders of companies with misleading marketing techniques to let them know that their offensive advertising harms students and their families by directing them away from potential federal, state, and institutional aid sources.

• NASFAA plans to partner with other higher education and student associations to alert the public, the media, lawmakers, and consumer groups about the harm caused by direct-to-consumer marketing that steers families away from the benefits available through the student aid office.

• In collaboration with these partners, NASFAA will lead outreach efforts to help families recognize the financial aid office as the most knowledgeable and unbiased source of financial aid information and the best place to start when seeking funding for higher education.