Welcome to the Summer issue of the VASFAA Voice and my final issue for the association. This issue is the “Transition” issue and what a transition period it is both personally, in the associations and the industry. It couldn’t be a more perfect theme for my final issue. To put this in perspective, this is my 34th year in Student Financial Aid administration, 22 with colleges and almost 12 with the lending community. Now let me be very clear that although it was not my decision to step down, it was the right decision at this time in my career and life.

When I first began visiting schools as a lender representative, my school colleagues and friends greeted me by saying, “......Gary, I’ve never seen you so relaxed.” Well you should see me now! While it would be nice to hit the lottery, I don’t need it to survive and enjoy the fruits of my labor. I have a low maintenance home and live two doors from my grandson with another due in August. My daughter just realized her need to become a productive citizen – and earn money to live. She was just offered a teaching position with a paid fellowship for earning her teaching certificate at the same time. She is coming off of a paid Master’s Assistantship where she basically extended her leisure time. My son is an NCAA licensed Soccer Coach and runs two very successful high school level soccer programs along with teaching High School Social Studies. My wife is entering her second year of retirement, second year of managing an education grant program for Montgomery County Public Schools, and more importantly, her second year of full recovery from cancer. By the way, for those of you who were reading these editorials all along, she still tells me where to go and how to get there – in the car and elsewhere. I owe her my life and sanity for the last 34 years of marriage.

During the last editorial, I said the following, …”It shouldn’t need to be said but our industry is in turmoil. It should be that obvious to everyone in our professions, whether you represent a school, a foundation, a lending related organization or family advocates for college access.”

What I didn’t say is how I really feel about the current situation and its effect on families, schools and conscientious agencies. To my friends and customers at schools, guarantee agencies and servicers, I want you to know that I was bound by corporate secrecy not to share information regarding my employer’s plans for simplification. You can be assured, however, that the acceleration of this simplification was a sudden announcement. The end result for some of you created chaos for offices, lender partners and for your impacted families.

I personally do not believe that anyone should be forced to complete a new Master Promissory Note. Weren’t they created to avoid the incidence of multiple promissory notes and to simplify the borrowing process for the borrower. Somehow that concept and Doing the Right Thing for the Customer (both school and borrower) got lost in the mayhem initiated by the Cuomo Comet and CCRA. Perhaps someone can explain to me how Doing the Right Thing is responsibly practiced when it only applies to how it impacts the practitioner? In the larger scheme of things, the student finance industry became victims of its own greed and self-inflicted market confusion.

Here is the origin of my personal perspective – perhaps you can relate and perhaps not as we all have had different experiences in our financial aid careers.

When I began in 1974, it was at a small two-year college in inner city Baltimore. Counseling and Professional Development was emphasized. Basic Grants were the biggest program and managing changes in the needs analysis formula were the subject of workshops, seminars and even federal reporting. Most Counselors today don’t have a clue as to how Needs analysis really works today – they let the computer figure it out. Associations were created by financial aid officers for the professional development of financial aid officers by financial aid officers. There was no conflict of interest.

Fast forward to the early 90’s and the introduction of Direct Lending. I served on a four-member Task Force (for lack of a better word) that included Jim Belvin of Duke, Joe Russo of Notre Dame, myself while the DFA at the University of Maryland University College, and led by John Dean of the Consumer Bankers Association. Our task was to come up with a working document to open the eyes of lenders and guarantors of 50 states who all had their own way of processing loans. Applications were as big as desktops in CT and RI and many required carbon paper. Each lender (bank – since it was virtually all banks serving their banking customers) utilized a proprietary established set of rules and guidelines for applying, approving, and disbursing their loans. The only national guarantors were United Student Aid Group and HEAF who provided guarantor services for some states and lender of last resort services. In most cases, each state had their own guarantor and there was no cross selling. Most processes were paper driven although some – like USAGroup, VELA and their successor, SEAA – developed methods for electronic communication between the school and guarantor. In short, if the lending community didn’t come together and simplify the process, forms and delivery of services, Direct Lending would become the new leader in student loans.

The end result of our work became the impetus for the creation of the Common Application, Common Line Concepts and ELM to provide ALL schools and ALL partners in the lending community with one fully supported method of simplifying the loan process. This is where greed collided with the greater good in the education finance process as evidenced by Cuomo’s targeting of the S&N behemoths. Their greed to control market share drove others in the industry – most notably guarantors – to develop and market proprietary loan processing software on a national basis. About 10 years ago, the door also opened for non-banks to play a dominant role in education lending. Most of this activity surfaced from behind back doors, such as alumni offices via consolidation programs, Direct mail campaigns from other entrepreneurs with no history or stake in the education field. Unfortunately, the targets of Cuomo’s investigation only received slaps on the wrist and schools and families are left with more confusion. Everyone lost focus on the common goal, and guess who is gaining ground amidst the confusion? If you said Direct Lending, you are correct. Direct Lending and the political ambitions of Andrew Cuomo according to many people with an opinion.

According to a statistic that I recently saw, approximately 100 viable, and many of whom were trustworthy, lending options have been lost. Nearly 3,000 (and growing) student loan professionals have been unceremoniously dumped to join the growing ranks of the unemployed in one of the worst economies that America has seen in recent times. Lender partners play a dominant role in many financial aid associations, and some used their marketing time to run financial aid training programs. No conflict there, right?! Oh and by the way, did you hear about the behemoths being bailed out by Congress with funding sources to fund their questionable loan practices?

It’s been a pleasure to serve this association and I wish each and every one of you all the best. Most of all, I hope you are all able to find time to focus on life’s most important priorities. Remember, the order is God, Family, Friends and only then work and only then because you have to eat.

I can be reached in New Market, MD at 402 Tailor Street, 21774, or on the phone at home at 301-865-5859, and on my cell at 301-788-0253, and on email at gspoales@verizon.net. My new company and title are below. I am available for consulting, staff retreats and Public Speaking appearances, specializing in Process Flow Management for developing an efficiently organized Financial Aid Operation.

Thank you once again to everyone who provided material for this newsletter. The entire association appreciates your efforts. As always, this issue’s contributors are listed at the end of the newsletter.

A parting note:
With all the sadness and trauma going on in the world at the moment, it is worth reflecting on the death of a very important person, which almost went unnoticed recently.

Larry LaPrise, the man that wrote 'The Hokie Pokey' died peacefully at the age of 93.

The most traumatic part for his family was getting him into the coffin. They put his left leg in. And then the trouble started.

Take time to laugh and enjoy your family. God Bless you.

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