<p>I recently learned that the college my daughter will attend (Brown) is a direct lender for Stafford loans. However, Brown does not waive the entire 3 percent origination fee or offer the best repayment incentive plans. Both my state nonprofit lender and the Rhode Island one have better deals.</p>
<p>When I called the Brown financial aid office and learned this, I asked if I could use a different lender. The person I spoke to said no, (and also suggested that no one else has ever asked that before). I hope to find the right person and convince Brown to let us use a different lender, or match the better incentives.</p>
<p>Any advice on how to handle this situation ? how to best convince Brown to let us use a different lender? </p>
<p>(I?m also appalled that I may have no choice in who my lender is. I just don?t understand how that can be. Is that legal? In the current student loan scandal, at least the students were given a list of preferred lenders.)</p>
<p>According to that link, there is a difference between a FFEL loan and a direct loan, which isn't very clear. It does say that: "Schools that participate in the FFEL Program will usually have a list of preferred lenders. Student loan borrowers may choose a lender from that list, or choose a different lender they prefer (for example, a credit union)."</p>
<p>The benefits of Stafford Loan are lower interest rate and deferred payments until after graduation.</p>
<p>If the school is enrolled in the Direct Loan lending program, then you really do not have a choice. If they are a FFELP Lender than you have Federal Regulations which guarantee your right to choose from any approved Title IV Lender.</p>
<p>Schools that are Direct typically will not decide to change to FFELP because the Federal Government gives schools who participate with Direct Lending kickbacks. (Hey....isn't that the same thing which got FFELP Lenders in trouble in New York?!?!)</p>