What lender should I pick for my student loans?

April 16, 2009 9:36 PM

Which lender should I use for my government student loans?

I have previously attended a direct loan school and thus I had to take out my Stafford and GradPLUS loans through the school directly. I am now going to another school that is FFELP school and I can choose my lender. I was given a preferred list from the school. I remember reading that sometimes the preferred list isn't the best deal around. And that you should shop around. However, I've read that it's getting harder and harder to find great borrower benefits such as waiving loan origination fees.

I found a list of the top 100 lenders. Yet #1 on that list is Sallie Mae which is a terrible company?

Have any of you found a lender that you like with good benefits? Anything else I'm missing?

posted by amalgamator to work & money (9 answers total)

While you can choose your lender you may want to check with your school to see if there is anyone they won't accept. I used Citibank for five years and all of a sudden my school decided that they weren't going to accept that lender anymore (without telling me, I might add). I can't really help with other recommendations. I use Sallie Mae now, not because of benefits but because I needed to pick someone ASAP so I could get the money.
posted by Nolechick11 at 10:35 PM on April 16, 2009

Sallie Mae has a lot of nice flexibility for altering monthly payments once you're in repayment, and they haven't messed around with my interest rates since I started with them about 4-5 years ago. I also have made sure to join Upromise because I get some cash credits back into my Sallie Mae account for the money I spend on basic crap in my daily life!
posted by so_gracefully at 10:47 PM on April 16, 2009 [1 favorite]

I searched hard and wide on my Stafford loan the last few weeks. I found Discover Student Loans to be the best deal.

No fees whatsoever, and a 0.25% interest reduction if you pay over scheduled ACH.
posted by floam at 11:58 PM on April 16, 2009 [2 favorites]

Nolechick11: I'm pretty sure that your school can't do that. From what I could read, they're not allowed to restrict you to a preferred lender list, or even charge you any fees or create penalties of any type for choosing your own lender. It seemed like a pretty strict deal.

I'll try to look up where I was reading this.
posted by floam at 12:03 AM on April 17, 2009

I used Access Group for grad school and thought they were great. They came recommended to me by two friends, who had both used them and had no issues at all.
posted by NotMyselfRightNow at 5:03 AM on April 17, 2009 [1 favorite]

I work at a university (in IT) and our preferred lender list is always the best deals from reputable lenders. Also, due to the shenanigans you linked to at Consumerist, a more formal system for selecting preferred lenders has been put in place.

If you are concerned, I bet your school's aid officers will explain exactly how they came to the list of preferred lenders.

As floam said, you can select any lender you want - what Nolechick11's school did is not allowed.
posted by barake at 6:50 AM on April 17, 2009

I have loans with Access Group and Sallie Mae and would prefer to deal with the folks at Sallie Mae. Have had trouble paying amounts in excess of what is due in any given month with Access Group, and their customer service is not as helpful as Sallie Mae's when it comes to such issues.

I know, though, that many people have had huge issues with Sallie Mae and they they have a horrible reputation.
posted by slateyness at 11:34 AM on April 17, 2009

UGH to Sallie Mae. I had 2 separate loans and my dad sent in 2 separate checks with the appropriate "payment booklet" pages they give you, and they still applied all the money to one loan and charged late fees on the other. I am still paying off my loans and I hope that I will never have to deal with them again once I am done.
posted by IndigoRain at 8:33 PM on April 17, 2009

I went with Discover student loans, they were the best...thanks!!!
posted by amalgamator at 9:44 AM on May 22, 2009