Earlier this summer, the federal government passed laws  to protect students from predatory private lenders. Their unintended side effect? The University of Minnesota can no longer offer the SELF Loan — a low-cost loan program administered by the state but run through banks on a preferred lender list — to University students as part of financial aid packages. Due to instances in other states where college loan officials took payments, paid trips and other graft from private lenders in exchange for preferred lender status, the new rules prohibited financial aid officials from promoting any private loans, including the SELF Loan.
Of course, not all loans are created equal. The State of Minnesota established the SELF Loan program more than 20 years ago to provide Minnesota Students with advantageous low-cost loans. SELF Loans have no origination, insurance or processing fees. They do require a co-signer, but the loan is made in the student’s name. The interest rate is set at the same low level for all bowers and is not dependent on personal credit scores.
Recently, the federal Department of Education ruled that while colleges and universities can no longer package the SELF Loan with the other financial aid it offered to its students, officials can still “promote” the loan. What that means, in practice, has not yet been made clear.
As the Department of Education writes the countless regulations that implement the new student loan laws, University of Minnesota officials are unsure to what extent they can inform students about the SELF Loan program. 
University students have a tough time financing their education. In the poor economy, many find themselves under- or unemployed. Rising tuition means students must scrape together increasingly large amounts of money in order to stay in school. The average undergraduate on this campus graduates with almost $25,000 of debt. The average graduate student owes $42,000. Students suffer because many unaware of SELF loans take out other, more expensive private loans that bury them in debt.
The legislation, passed at the end of May, lays down the law. Now it is up to the Department of Education to write the new regulations that tell universities what they can and cannot do.
So far, most colleges in Minnesota have not even tried to promote the SELF loan or entered into the exhaustive process to prove to the Department of Education that the program is corruption-free. Minnesota officials already know it is: The SELF program has loaned about $1.7 billion since its inception in 1984, and no evidence of wrongdoing have ever been found. In order to persuade federal authorities, the University has taken on the unenviable task of implementing the new regulations. At the moment, they exist only in draft form stacked an inch thick.
While the process winds on, many students remain unaware of SELF Loans as a cheap option to finance their education. The number of students who applied for the loans during the year 2009-2010 is roughly 5,000 less than applied four years ago — despite increased tuition and enrollment. If the University cannot effectively promote these loans to students, even more will be unable to take advantage of this advantageous loan.
The Department of Education should write the new regulation as quickly as possible so that no student misses out on the SELF Loan at a time when students can least afford to take on expensive debt.
Jacob Piekarski is a member of the Editorial Board. He welcomes comments at [email protected].