ADVICE ON SHOPPING FOR A STUDENT LOAN ADVICE ON SHOPPING FOR A STUDENT LOAN For students trying to navigate the complex world of college loans, the Project on Student Debt, a non-profit group in Washington, D.C., offers these tips: • Borrow only as much as you really need. • Talk to a financial aid officer at your college to see if you might be eligible for more grants even if you've been offered student loans as part of your financial aid package. • Start with federal loans. Interest rates on Perkins loans (5 percent fixed) or Stafford loans (maximum 6.8%) don't change over time and aren't affected by your credit rating. They also come with some borrower protections in case you're unemployed or have other financial problems after college. • Avoid private student loans (sometimes called "alternative" loans) if possible. Even if they start with what seem like low rates, those rates can shoot up at any time. Also, they don't have the borrower protections that come with federal loans. • Beware of private loans in disguise. Some schools put their own name on private loans, or the loans may have other brand names that make them look safer than they really are. • Shop around. If your school recommends borrowing from a certain lender or lenders, find out why. If you find a good rate on a private loan, keep talking to other lenders, and see if they will beat that rate. Make sure you get the final deal in writing and that you understand the limitations and restrictions. WASHINGTON  Dozens of colleges, universities and trade schools have been ordered to turn over documents to government officials explaining why a single lender at each school handles the majority of federally backed student loans. The request, sent to 55 schools, comes amid concerns that some colleges might be steering students improperly to lenders who reward schools for the extra business. The schools have until Friday to give federal education officials documents dating to July 1, 2005, that include correspondence with lenders, loan policies and written descriptions of how preferred lenders were chosen. The targeted schools include large public universities, private liberal arts colleges and career schools where students received at least $10 million in federal loans for tuition and fees during the 2006-07 school year, according to data obtained from the U.S. Department of Education by Gannett News Service under the Freedom of Information Act. Education officials selected the 55 schools from a list of 921, originally identified in June, where a single lender handled at least 80% of federally backed student loans. In a recent letter seeking the documents, the Department of Education reminded officials at the 55 schools that students must be allowed to choose which lender they use when participating in the Federal Family Education Loan Program. "A school may not steer or coerce a borrower, directly or indirectly, to choose a particular lender," Victoria Edwards, chief program compliance officer for the Department of Education, wrote in the Oct. 24 letter. "A lender may not have any agreement, or engage in activities, with a school that prevents or impedes a borrower from exercising the right to choose a lender." The scrutiny follows reports that some schools and financial aid officers received gifts from lenders in exchange for being placed on preferred lender lists students are encouraged to use. Several schools had allowed preferred lenders to staff call centers and declined to process loan applications for students who chose other lenders. Schools have begun adopting codes of conduct that bar officials from accepting gifts from lenders. And the Department of Education, at the urging of Congress, is adopting rules requiring that schools include at least three choices on preferred lender lists and barring schools from recommending lenders in exchange for financial incentives. Officials at a handful of the 55 schools contacted by Gannett News Service said they don't believe they've done anything improper. At Faulkner University in Montgomery, Ala., Edamerica processed $12.2 million, or 87%, of $14.1 million students at the school received in federal loans during the 2006-07 school year, according to the data. The school has never steered students to that lender, said Buddy Jackson, director of financial aid at the Christian college. But Edamerica has an advantage over its competitors: It's the first of about 10 recommended lenders listed on the school's financial aid website. Jackson said the company offered to update the website last year at no charge, and the school accepted. "We just happened to be dealing with them when they offered to do it," said Jackson. "We can use the help." Jackson also said he had served on an Edamerica advisory board until recently. Education Secretary Margaret Spellings has urged schools to end such potential conflicts of interest, and legislation moving through Congress would prohibit college officials from serving on boards of lenders that do business at those schools. Students attending Champlain College in Burlington, Vt., are told their loans will be processed through the Vermont Student Assistance Corp. (VSAC), if they don't propose their own lender. The non-profit, state-created lender handled 94%, or $15.3 million, of the school's federal loans last year, the data indicate. Four other Vermont schools — all of which use VSAC — are among the 55 that have been ordered to turn over financial aid documents. David Myette, director of financial aid at Champlain College, said VSAC was a logical choice as a default lender because it offers hands-on customer service, is familiar with the state and doesn't charge origination fees. "Given the borrower benefits and the service, I have no problem suggesting VSAC," he said. Enlarge By Al Grillo, AP Education Secretary Margaret Spellings, seen here visiting an elementary school in Anchorage, Alaska in August, has urged colleges and universities to end potential conflicts of interest with lenders and legislation moving through Congress would prohibit college officials from serving on boards of lenders that do business at those schools. Conversation guidelines: USA TODAY welcomes your thoughts, stories and information related to this article. Please stay on topic and be respectful of others. Keep the conversation appropriate for interested readers across the map.