What's The Interest Rate, Chase?

Chase introduced changes to their Chase Select private student loan product, switching from a Prime Rate to a 3 month LIBOR based index.  I thought I would do a little reconnaissance to determine what the range of interest rates might be on these loans.   I went to their Private Student Loan page and thought a good place to start would be a link titled "View current interest rates." 

Here is what I found for Private Loans:

Private Loans Our private loan is based on the London Interbank Offered Rate (LIBOR). The LIBOR rate is adjusted quarterly. School Certified Private Loans Chase Select is a school certified loan product. This means your school must offer this loan product for you to be eligible to receive it and it also requires school certification. Interest Rate Index For Chase Select Month LIBOR Rate* LIBOR Rate April 4, 2009 - June 30, 2009 1.32% * The "Variable Rate" is equal to the Current Index plus or minus a Margin. The Variable Rate will change quarterly on the fifteenth day of January, April, July and October (the "Change Date(s)") if the Current Index changes. The "Current Index" for any calendar quarter beginning on a Change Date (or for any shorter period beginning on the Disbursement Date and ending on the last day of a calendar quarter) is based on the three monthly London Interbank Offer Rate ("LIBOR") Rate as published in the "Money Rates" section of The Wall Street Journal on the fifteenth day of the preceding month (round to the nearest one-hundredth percent 0.01%). ------------------------------------ Looks good to me, 1.32%!  Wait a minute, where is the margin?  If you read the footnote, it indicates that the "Variable Rate" is equal to the Current Index plus or minus a Margin.  What makes the disclosure so deceptive is the fact that, earlier on this page, Chase lists the actual interest rates for Stafford and PLUS loans.  How many folks will apply for this loan thinking they are getting an amazing interest rate?  As the Federal Reserve notes multiple times in their proposed regulations on private loan disclosure, "The Board considered that the private education loan population includes students who may lack financial sophistication and that the size of the loan could be relatively significant and important to the borrower."  Is the disclosure about private loan interest rates above really well-suited to "students who lack financial sophistication"? ---------------------------------------- OK, so maybe I was just looking at the wrong web page for interest rates.  Let's take a look at their Learn More link.  Nope, not there.  Only these features: Features include: No payments required while in school No origination or repayment fees† 0.25% Interest rate reduction for having monthly payments automatically deducted from a bank account Cosigner release after making 36 consecutive on-time payments of principal and interest Loans from $500 up to your cost of attendance (minus other aid) each year ------------------- Maybe I can find the interest rate ranges under the Review Chase Select Private Student Loan FAQ?  Nope.  So much for interest rates being a frequently asked question.  ------------------------- Oh, wait, here it is.  If you follow this sequence of events (Is this transparent disclosure?) you will find the answer to the question: 1.  Start at Chase Student Loans.  2.  Click on Chase Select Private Student Loans. 3.  Click on Learn More.  4.  Click on See A Repayment Example (look closely for the link on the right side of the page).   At that point, a potential borrower would need to hone in on the Interest Rate row (among the 11 rows in the table) to discover an interest rate range of 6.07% to 13.57%.  These rates might explain why they make it so difficult to find them.  Can you imagine a marketer hiding the best features of their product as well as Chase has hidden the interest rates on their private loans?  This is a cautionary tale of why the Federal Reserve needs to be so concerned about improving transparency on private student loans (see here and here for my comments on the Federal Reserve's proposed regulations).  They also must include specifics about the prominence of these disclosures to avoid a convoluted four step process to find them.  Since when does "View Current Interest Rates" mean anything less than knowing what range of interest rates you might pay on a variable rate student loan?  Regulations requiring more transparency on private student loans cannot come soon enough for students!