We at Overture are spending our days focused on building a technology platform that will bring transparency to private student lending. We think this effort is important, here's why:

While many lending institutions lump them in with other consumer lending products, private student loans are different. I am going to make a big deal about some semantics but the language used hints at a disconnect. Importantly, student loans are not used for consumption. They are used to finance an investment. An investment that will payback over a borrower's working lifetime. In most cases a student will carefully consider her options when choosing a college destination. But the financing of that investment is usually done under great time pressure(enrollment deadlines), by the financially inexperienced(college students*) and with opaque, haphazard information( the latest direct mailing received).

Creating transparency in that financing transaction is good for both parties. Better information about total loan costs and monthly payments along with transparent rate and fee structures lead to better borrowing decisions. The Student Loan Marketplace from HESC provides this comparable, transparent information across a battery of loan products from many different lenders by completing one common form. These sortable and comparable real loan offers will lead to better and more appropriate borrowing decisions. Better borrowing decisions lead to better lending outcomes. (an example of less than ideal lending outcomes)

*Parents are often also involved in the decision but since private student loans basically did not exist 10 years ago, the vast majority parents have very little understanding of them. This lack of familiarity can lead to bad decisions by borrowers. Most people can tell you what a mortgage is but very few can explain how an option arm mortgage works. But that's another story entirely.