Paying for College Blog

Preferred Lender Lists...Here We Come!

I am starting to see a smattering of lender lists on school financial aid websites.  Here are some that I uncovered this afternoon:

• Grinnell College provided the following details for their 2009-10 Stafford Lender List:

        Lender Selection: We contacted lenders previously included on our list and determined that         the following would continue to be included for 2009-10 based on criteria described below.         Additionally, lenders who asked to be added to this list were considered using the same             criteria. Grinnell State Bank is new to the list. This list is effective as of 11/18/2008.

SLA To Host February 18th Webinar on "Managing Lender Selection in Time of Financial Turmoil"

Student Lending Analytics is pleased to announce that Tim Ranzetta of Student Lending Analytics will be hosting a complimentary webinar on “Managing Lender Selection in a Time of Financial Turmoil” on Wednesday, February 18th at 1:30pm Eastern Time.  Click here to register. 

TG To Continue Paying 1% Federal Default Fee for 2009-10

 TG announced today in a press release that they would continue paying the 1% default fee on federal loans.  This policy applies for both Stafford and PLUS loans for the 2009-10 academic year. 

Parent PLUS Loan Repayment Terms: Read the Fine Print, It Can Save You Dollars

I was reading through the sections of the Higher Education Opportunity Act pertaining to Parent PLUS loans and came across a clause that all parent borrowers should be aware of.  As most of you are aware,  HEOA provides a Parent Plus borrower with the opportunity to defer payments on this loan while the dependent student meets the conditions for an in-school deferment.  Previously, repayment on PLUS loans began no later than 60 days after the full disbursement of the loan. 

In Case You Missed It...Two Bank Mergers Completed on New Year's Eve

Well, back after two weeks with no shortage of news to blog about.  First, up, PNC's acquisition of National City and Wells Fargo's acquisition of Wachovia both closed on December 31, 2008.  Both acquisitions were driven by troubles in the mortgage portfolios of the acquired companies which forced them to find a suitor. 

How an Alternative Loan List Can Save Your Students $

With schools contemplating whether or not to develop alternative lender lists for their students, here is one good reason why:  they can save your students money. 

Don't Forget About Forbearance!

As you begin to compile your FFELP and Private Loan RFIs, please do not forget to ask about forbearance policies and rates. 

Don't Forget the Fees When Evaluating Student Lenders

As I was reading this article about rising bank fees in the Wall Street Journal today ("Banks Boost Customer Fees to Record Highs"), I could not help but think that there is a cautionary tale here for those who take out student loans.  The article mentions the innocuous sounding $10 ""overdraft protection transfer fee", $3 ATM transaction fees and bounced check and overdraft fees of $32-$35.  

Here is an incredible statistic:

The Transparency Report: Private Student Loans

With implementation of Title X of the Higher Education Opportunity Act up to 2 years away, I wanted to evaluate the level of transparency that lenders are currently providing on private student loans. SLA recommends that schools analyze and rate the level of transparency of lender websites into their lender selection process. Why? It is difficult to make educated and informed decisions without lenders providing thorough, accurate and germane information about their private student loan products.

Earlier this year, Student Lending Analytics developed resources to help student borrowers make informed and educated decisions about private loans (note that SLA is an independent research and advisory organization that is not affiliated in any way with any financial institution):

SLA Estimates $5.8 - $7.1 Billion Drop in Private Lending Capacity (Update 3)

Time to update these numbers from this earlier post from August: 

It's crunch time!  Students are returning to school.  College bills have been sent and are coming due.  In a recent SLA survey, 73% of financial aid respondents indicated that school bills were not due until after August 15th so any impact will be felt in the weeks ahead.  With EFP, Campus Door, CLC and My Rich Uncle recently ceasing or curtailing their private loan originations, over $1.5 billion has left the market in just the last three weeks alone.  Students and their parents are notoriously last minute when it comes to arranging for college financing as this MEFA survey from 2007 confirms.  

The table below, compiled by SLA, provides an updated estimate (as of 11/7/08) of $5.8 - $7.1 Billion of private loan capacity which has left the market, or about 31-37% of the $19.1 billion dollar market (College Board data for 2007-08).  These figures will likely prove conservative as they do not take account of any of the lost volume from Wachovia's exit nor the numerous smaller players who have left the market.