CLEVELAND, June 20 /PRNewswire-FirstCall/ -- The following story was written by Rick Vonk, president of Key Education Resources. In a recent edition of the Honolulu Advertiser, an article ran that focused on the current relationship between colleges and private lenders, and how the relationship may not be advantageous to students. The article's headline: "College a 'Wild West' of loans." Chances are if you read, listen to or watch the news, you've come across some variation of this headline and story over the past three months. What you probably have not come across is a story citing that for the 2007-2008 school year the U.S. Department of Education projects to meet only 60 percent of students' borrowing needs . . . or that from 2000 to 2007 the cost of tuition, fees, room and board at public and private four-year colleges have increased 52 percent and 37 percent, respectively. The bottom line is this: as the cost of a college education continues to increase, and as government lending and school grants fail to keep pace, students and their families will need to rely more than ever on scholarships, jobs, savings and private lenders to bridge the widening gap. However, the picture is not so grim. It is estimated that a college degree is worth an additional $1 million in earning power over an individual's lifetime. There are risks, which include accumulating debt, but also great opportunities, which can range from building wealth to making a difference in the lives of others. Be your own advocate Regardless of what headlines you may read or impressions you may have about college loan offices and lending institutions, borrowers are the true drivers of the lending process. As such, you need to make responsible and careful decisions about who you borrow money from and how you choose to borrow that money. Financial aid offices can help point you in the right direction, and they often have a list of preferred lenders that they will steer you toward. However, keep in mind that this preferred list of lenders is not comprehensive, and it is both your right and responsibility to research all of your borrowing options. To do this, you need to know what to look for. Look out for your best interests Looking out for your best interest involves knowing not only what to look for but also what to watch out for. Here are some suggestions for navigating your way through some of the more common financial aid options. (Note: the less you borrow, the better off you'll be, and the earlier you can start saving, the less you'll have to borrow.) -- Scholarships -- Scholarships, money gifted to a student based on need or merit, are the best vehicles for funding a college education. The good news is that almost anyone can qualify for a scholarship. The bad news is that there are literally thousands upon thousands of scholarships available, so it's important to be selective when choosing what scholarships to apply for. The schools you are applying to should be able to help you. Some things to consider: what is the difficulty of preparation versus potential award amount? What is the deadline for the application? Also, some scholarships are only awarded for the first year of study. Students are better served by planning to meet the financial obligations for the full length of their education. -- Work-Study Programs -- Work-Study is a federal program that provides jobs for students in need of financial aid. Jobs typically are on campus and associated with the college, although some placements can be with companies off campus. The rate of pay varies from position to position, but students are guaranteed at least minimum wage. The downside to Work-Study programs is that there is a limit to how much you can earn, which is determined by your overall financial aid package, as well as the fact that balancing a job and studies can be difficult. -- Federal Loans -- Federal loans offer the lowest rates and the most flexible post-graduation terms. The downside? The government caps the amount students can borrow. Also, federal loans through financial institutions typically provide discounts; however, many of these discounts have to be earned and don't kick in until after repayment begins ... the same time students are consolidating loans, which wipes out the benefit. So you should look for loans that offer up-front discounts, such as waived origination fees. -- Private Loans -- When scholarships and federal loans cannot cover the full cost of a student's education, private lenders bridge the gap by providing borrowers with guaranteed loans at competitive rates. Private lending is an extremely competitive market, and there are many start-up organizations that make fantastic claims. Read the fine print. The advertised rates are always reserved for people with excellent credit ratings-something most college students do not have-and the rate will not be known until after the application is submitted. Also, applying to multiple lenders can negatively impact your credit score. So prior to completing any applications, ask for average rates and fees, as well as what the highest rate and fee could be. Programs with no fees are best, as most people eventually pre-pay a loan. -- Payment Plans -- It is easy to look at the lump sum bill at the beginning of each semester and think that it is unmanageable. However, if you begin to consider what you can contribute on an ongoing basis, you might find that you can afford more upfront than you realized and reduce the total amount you and/or your family need to borrow. For instance, if you can afford $500 a month over a ten-month payment plan, that equates to a contribution of $5,000 a year. Over the course of four years, this could reduce your student loan burden by $20,000. Go to the source When it comes to identifying and selecting a private lender, financial aid offices still serve as a great resource. Look at the terms offered by the school's preferred lenders. It is often the case that these lenders are on the preferred lender list because they offer favorable rates, provide good service and have strong reputations. Don't be afraid to ask your loan officer, or lending agent, the criteria for being placed on the preferred lender list. And look at borrower benefits. Over the course of a loan, these front-end and back-end benefits can save you on the total cost of the loan. Front-end benefits include: -- Low origination fees (the fee you pay for taking out the loan). -- Low or no guaranty fees (what you pay to a third party to ensure that you will repay your loan). Another attractive feature to look for is online application and electronic fund transmission, which speeds up the processing of your application. Back-end benefits include: -- Reduced interest rates for consecutive on-time payments. -- Reduced interest rates for direct debit of payments. At the end of the day, trust your judgment. Seek the best opportunity for you and make decisions that are in your long-term best interests. Select a lender that is established and has a credible reputation, because securing the best rates and terms available should not be a western-style showdown, with guns at the ready, but a mutually beneficial relationship that minimizes your risks and starts you off on your ride into the sunset. About Key Education Resources Key Education Resources, the education financing arm of KeyBank, is one of the largest education loan providers in the U.S. In business for more than 50 years, Key Education Resources provides federal education loans, private loans, monthly payment plans and education consolidation loans for students and families in K-12, undergraduate, graduate and professional education institutions. For more information, visit https://www.key.com/collegebound. About KeyCorp Cleveland-based KeyCorp is one of the nation's largest bank-based financial services companies, with assets of approximately $93 billion. Key companies provide investment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. For more information, visit https://www.key.com/. DATASOURCE: KeyCorp CONTACT: Jill Arslanian of KeyCorp, +1-216-828-7420, Web site: https://www.key.com/ http://www.key.com/newsroom https://www.key.com/collegebound

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