Paying for College Blog

2009 SLA Private Student Loan Series

In case you missed it, here are recent posts focused on helping students/families make the best decisions on private student loans.  Students are encouraged to exhaust all grants, scholarships and federal loan options prior to considering a private student loan.

• Most popular post:  Shopping for Private Student Loans Makes a Difference!
  
  • Results from 6 student loan applications yields interest rates between 7% - 12%
• "Miss A Payment On Your Private Student Loan, You Could See Your Interest Rate Rise"
  • Highlights three lenders that have clauses in promissory notes which could result in 2-3% increase in interest rates triggered by one late payment
• Borrower Benefits on Private Student Loans
  • Provides examples of savings opportunities available to private loan borrowers
• What Ingredients Go Into the "Secret Sauce"?
  
  • Insights into the factors that lenders consider in making their credit decisions
• Does It Make Sense To Shop Around For Private Student Loans?
  
  • Provides details on new Fair-Isaac policy about the impact of applying for multiple student loans on your credit score (hint:  it helps student borrowers)
• The Promissory Note
  
  • Highlights the key terms to be aware of when evaluating lender promissory notes
• What is the Meaning of "Instant Credit Response"?
  
  • Reviews the on-line application process and analyzes the speed of lender credit reviews
• Private Loan Fee Structure
  
  • Benchmarks most common fees assessed by private lenders for both origination and servicing of loans

Peer-to-Peer Sites In Search of More Sponsors

Article in the Christian Science Monitor today highlights websites where borrowers can go to try and raise money for their college educations.  The sites highlighted are:

• GreenNote
• CollegeDegreeFund.com
• GradeFund.com

Pilot Program to Provide Private Student Loans to International Students at 40 U.S. and European MBA Programs

A press release from the Graduate Management Admissions Council (GMAC) highlighted the following aspects of the program:

• Pilot has capacity to provide up to $500 million for international students at 40 business schools in the U.S. and Europe for the 2009-10 academic year
  
  • Assuming average loan size of $40,000 (my guesstimate), this would amount to 12,500 loans that this program has the capacity to make, or roughly 300 students at each of these 40 institutions. 
• An unnamed international bank will be partnering with experienced service providers to implement the program (seems a bit odd to me not to name the financial institution in this press release as it would be good publicity)
• Kevin Moehn, formerly of Sallie Mae,  who helped create MBA LOANS program, has started his own company to facilitate this international MBA student loan program
  • Here is a link to his company's website
• GMAC, a non-profit education organization of leading graduate business schools worldwide, may serve as advisor to the program, but will have no management, operational or financial interest, according to the press release. 

This seems a promising development (at least for these 40 schools) in helping solve an issue that we have posted extensively on. We will keep readers posted as more details become available. 

Related Posts: 

• January 22, 2008:  MIT Sloan School teams up with MIT Federal Credit Union
• December 16, 2008:  Sallie Mae responds to questions about loans to international students
• December 3, 2008:  Soft power and educating international students
• November 5, 2008:  Penn invites lenders to respond to RFP for international student loans
• October 13, 2008:  Citibank discontinues custom loan program for international students
• October 10, 2008:  NYU invites lenders to respond to RFI for private loans for int'l students

• Pilot has capacity to provide up to $500 million for international students at 40 business schools in the U.S. and Europe for the 2009-10 academic year
  
  • Assuming average loan size of $40,000 (my guesstimate), this would amount to 12,500 loans that this program has the capacity to make, or roughly 300 students at each of these 40 institutions. 
• An unnamed international bank will be partnering with experienced service providers to implement the program (seems a bit odd to me not to name the financial institution in this press release as it would be good publicity)
• Kevin Moehn, formerly of Sallie Mae,  who helped create MBA LOANS program, has started his own company to facilitate this international MBA student loan program
  • Here is a link to his company's website
• GMAC, a non-profit education organization of leading graduate business schools worldwide, may serve as advisor to the program, but will have no management, operational or financial interest, according to the press release. 

This seems a promising development (at least for these 40 schools) in helping solve an issue that we have posted extensively on. We will keep readers posted as more details become available. 

Related Posts: 

• January 22, 2008:  MIT Sloan School teams up with MIT Federal Credit Union
• December 16, 2008:  Sallie Mae responds to questions about loans to international students
• December 3, 2008:  Soft power and educating international students
• November 5, 2008:  Penn invites lenders to respond to RFP for international student loans
• October 13, 2008:  Citibank discontinues custom loan program for international students
• October 10, 2008:  NYU invites lenders to respond to RFI for private loans for int'l students

Understanding Your Credit Score

Insightful article in New York Times that describes the importance of understanding your credit score. It also provides links to sites to access your free credit reports. 

Considering a Private Student Loan? Read This FIRST!

Caution:  Before considering a private loan be sure to access all the scholarships, merit awards, federal grants, federal loans (Perkins, Stafford AND PLUS) that are available to you.  Private loans should be considered only as a "last resort" loan.  While many private loans may sport "teaser rates" that look particularly attractive, these are VARIABLE RATE loans which will move up with interest rates in the months and years ahead. 

SLA developed Private Loan Options to assist students looking for the current rates and fees for private loans.  This list of lenders is based on SLA's analysis of the lenders that showed up most frequently upon review of over 700 school private loan lender lists.  We review lender websites and update this list on a monthly basis to capture any changes in index rates (e.g., Prime or LIBOR) or margins (e.g., Prime + 2% to Prime + 10%) that might occur. 

Tips for Repaying Your Student Loans

A timely article from Kiplinger's about the various options available for repaying federal and private student loans.  With the six month grace period ending for students who graduated in the spring of 2008 and a difficult employment situation, this is key topic. 

Key points: