<p>Does anyone have any experience comparing lenders for Stafford loans? I understand that the subsidized Stafford has the government paying the interest while the student is in school, but that the unsubsidized does not. I called a few lenders who all had similar interest rates with an occasional incentive for repayment. In your experience, are lenders basically offering the same product?</p>
<p>Thanks!</p>
<p>When S started taking out Stafford loans for law school, we found that his university worked with an loan servicer (Great Lakes Educational Loan Services) who in turn works with hundreds of lenders. After we eliminated every lender who charged an up-front fee (mostly major banks), we found tons for no-fee and with repayment incentives. The interest rates are set by the government every July 1.</p>
<p>The product is the same, it's the up-front fees and repayment incentives that you can shop for. If you have a subsidized Stafford, since the feds pay the interest during school, service may be of more importance. You can use many lenders over the course of undergrad/grad. You can consolidate with any of them (or perhaps a new lender?) when graduation time comes. That's when you'll want the best repayment deal.</p>
<p>When I spoke with the Finaid Office about the subsized Stafford in my kid's package, I was told there is a 3% origination fee for the loan but that the College pays half of it. That still leaves a 1.5% origination fee. </p>
<p>Am I understanding correctly that I can find my own lender who will offer the subsidized loan with NO origination fee? If that is correct, how would I go about finding those lending organizations (since it won't be through the college finaid office)? Thanks -- this advice really is worth something!!</p>
<p>Slightly different experience but same advice as maizeblue.
We used one of the preferred lenders that is listed by the school. The smaller lenders tend to charge the fee. I don't remember a fee but a fee is allowed by the FFELP program up to 3%. What we were and are always concerned about is what are the discounts to the loan and how those discounts affect the total interest paid and the number payments to pay off the loan. The discounts are not proscribed by FFELP and can vary from lender to lender. The affect (savings) of the discounts to us, far exceeds the cost of any fees that are tact to the loan. </p>
<p>For students in Pennsylvannia, (ours is at CMU), the loans are serviced by AES, who get a service fee from the lender.</p>
<p>Your lender will inform you and answer your questions. Usually 800 number.</p>
<p>Personally, a 3% origination fee is very reasonable. Home loans fees can easily be 6%+ even though you can see only 3%. Buying a home will also cost you ~5% in fees even though you don't recognize it in the price of the house. And if you buy a new house, the system development charge (SDC) will be 10's of thousands. </p>
<p>Pay more attention to how the lender "makes" money rather than the fees and interest rate. Minimize on how the lender "makes" money.</p>
<p>Wondering whether anyone could suggest reputable Stafford lenders who do not charge up-front fees and may provide other incentives. (I "googled" "Stafford lender" and the first hit that came up sounded too good to be true. How do you know who's repuatable?) Again, lenders our LAC suggests charge origination fees....</p>
<p>D also attends school in PA (Haverford) and has an unsubsidized Stafford loan through AES. It was on the school's preferred list...they also appear to fund loans in other states as well. You will want to check out the website (American Education Services).</p>
<p>Talked to the finaid folks today. The school is a direct lender so we have no choice about who provides the loans (and we get stuck with the origination fee). However, I did "google" the terms "stafford" and "lender." One of the first responses was for a lender that looks legit, charges NO upfront fees and will eliminate some payments as an incentive to repay the loan in a timely fashion. Guess there are some deals for those who look around....</p>