College Lenders Lists
What is a Lender List?
College financial aid offices often provide
Lender Lists (or Preferred Lender Lists) to
students and parents on their websites or as
handouts. These lists are intended to provide you
and your parents with a starting point in your
search for student loan options. Lender Lists
essentially provide a quick comparison of
Student Lenders page,
which lets you enter loans you've uncovered in your research,
can help you make more in-depth comparisons.
A typical Lender List will include certain
basic information about an education loan:
1. Lender Name
2. Interest Rate - Typically a fixed rate for federal programs and a range for private loans
3. Lender Code - a 6-digit code assigned to participants in the federal loan programs
4. Lender Contact Information
5. Borrower Benefits - Lender rewards for actions such as on-time payments, auto-debit of payments, or graduation
6. Links to the Lender's Website
How Do College Financial Aid Offices Come Up with a Lender List?
A college's Lender List is aimed at providing you with a
range of good student loan choices. As part of this process, the
financial aid office must disclose the criteria it has used
to select the lenders on the college's Lender List. A financial
aid office is typically looking for a student lender to provide
competitive interest rates, quality customer service, and strong
borrower benefit programs.
A lender list will have information from at least 3 lenders.
As a result of recent changes in regulation, lenders cannot
provide any inducements and colleges cannot accept any payment
for inclusion of a lender on a college's Lender List. Colleges
are required to consider the best interests of their students
when creating their Lender Lists.
Selecting a Lender
You are not required to select a lender off the Lender List.
It often can serve as a good starting point in your
search for student loans.
However, you may have specific needs as a borrower that are not
met by the lenders on the list. Or you or your parents may already
have accounts with a bank you trust and want to keep all your
financial dealings in one place.
One advantage of going with a lender off the Lender List
is that the loan application and disbursement process will
typically have a shorter turnaround time and require less
legwork on your end. Since the college has likely set up a
relationship with lenders on the list, the administrative
side of processing an application will likely be more
automated and run more efficiently.
Whether you use the Lender List exclusively or not, make
sure you do your homework when it comes to student loans. A
little work up front in choosing a lender can save you a lot
of money down the road!