Student Lending Analytics Blog

What's New With Lender Lists?

Knee-deep into my annual analysis of school lender lists and the prevalence of lenders on those lists, I thought I would come up for air and highlight some interesting observations:

• Western Michigan University used results from a student survey to rate their alternative lenders.  The five survey questions focused on application process, value, customer service, would student recommend to friend and overall satisfaction.  Almost 20% of their student borrowers responded to the survey.  With a top possible score of 20, the scores for the seven lenders varied from 12.97 to 15.85. 
  
  • Please contact me at [email protected] if you are interested in implementing a similar survey tool at your school (at no cost!)

Looking For A Private Student Loan Resource For Your Students?: SLA Updates And Improves Private Loan Options Site

For those looking for a neutral, timely and comprehensive private loan lender list, SLA created Private Loan Options with the following features:

• Lists sixteen major lenders, including credit unions, regional and national lenders
• Details interest rate ranges and fees for each loan product
• Provides timely updates when changes occur to lender margins or interest rate indices (LIBOR or Prime Rate)
• Identifies and provides links to 16 states with alternative loan programs providing your students with fixed-rate alternatives
• Generates dynamic list of lenders each time page is refreshed
• Provides borrowers with standard application and solicitation disclosures to help them compare private loans
• Lists borrower benefits, cosigner release terms and whether lenders require payments while student is in school
• Provides upfront statement encouraging borrowers to seek federal loans first
• Describes common loan terms with a borrower glossary

Here is just a sampling of the colleges currently linking to SLA's Private Loan Options site:

Where are the New Private Student Loan Disclosures?

I have been cycling through five of the leading private education loan lender websites tonight to review their new application/solicitation disclosures required by the Federal Reserve's Regulation Z, which became effective today, February 14th: 

• Chase:  included Reg. Z. application/solicitation disclosures for four-year, two-year and graduate institutions. 
  
  • Notes indicate that "Rates are typically higher without a cosigner," so it would appear that the quoted rates in the disclosure form assume that borrower has a cosigner
  • The repayment examples demonstrate the value of paying interest while in school is almost $9,000 vs. deferring payment until after graduation.

In Defense of a Focused Lender List (Redux) And The $600 Million Question

So, there I was at 30,000 feet, a little cranky because they didn't have any snacks on board my United Flight, forcing me to ingest my third CLIF bar of the day (Cool Mint Chocolate in case you were wondering) while thinking about what to do next since the battery on my laptop ran down two hours outside of San Francisco.  The answer was staring me in the face.  I had lugged all 137 pages of it in hopes of preparing for a future webinar (more on this next week).  Yes, the dreaded Notice of Proposed Rulemaking with that oh so enticing subject line:  "Institutions and Lender Requirements Relating to Education Loans, Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Proposed Rule."  Phew. 

So, I grabbed my highlighter and went to work fastidiously underlining, scribbling notes in the margin, envisioning Powerpoint slides in my head (did I just admit that?) and just about having the best time possible filling my head with all this information.  Did you know the government is estimating the self-certification form will burden schools to the tune of about 1,100,008 hours? 

And then it hit me like a sledgehammer on page 74: 

ITT Asks ED To Require that School and Lender Acknowledge Preferred Lender Arrangement

Here is ITT Educational Services' comments on the Notice of Proposed Rulemaking (NPRM):

The proposed definition of "preferred lender arrangement," lacks a requirement that there be a meeting of the minds between a lender and a covered institution or institution-affiliated organization with respect to whether a preferred lender arrangement exists.  This requirement is important, because a preferred lender arrangement triggers a number of reporting and disclosure obligations by both the covered institution or institution-affiliated organization and the lender under 601.01, .20, .21 and .40 of the proposed rule.  Material portions of the information required in those reports and disclosures will not be prepared or consistent, unless both the covered institution or institution-affiliated organization and the lender acknowledge that a preferred lender arrangement exists..."

Interesting Disclosures on School Lender Lists

As part of my focus on lender lists recently, I came across these disclosures which increase transparency of the lender selection process or provide additional information that can be useful for students (please send me any additional ideas that you would like for me to post): 

• Skidmore College provided the specific reasons that they selected individual lenders.   Here is why they selected two of the lenders on their list: