Recommended lenders for the Stafford Loan?

Colleges and Universities A-Z Barnard College
1

<p>So Barnard provides three recommended lenders for the Stafford loan but i was wondering if anyone here can offer a personal recommendation?</p>

<p>and on a sidenote, about student loan xpress:
<a href=“http://media.www.columbiaspectator.com/media/storage/paper865/news/2007/04/06/News/Loan-Company.Removed.From.Cu.Preferred.Lender.List-2827844.shtml[/url]”>http://media.www.columbiaspectator.com/media/storage/paper865/news/2007/04/06/News/Loan-Company.Removed.From.Cu.Preferred.Lender.List-2827844.shtml</a></p>

2

<p>My d. went with Student Loan Xpress last year -- which clearly offers the best option in terms of reduced interest & faster pay back of the loan. (Reduces the interest charged by 2% if the student signs up for automatic withdrawal - but keeps monthly payment amount the same, which will result in an earlier payoff)</p>

<p>I asked Barnard financial aid about their current relationship with that lender, and here is what they said:
[quote]
Barnard has not yet made a decision regarding our relationship with Student Loan Xpress. Student Loan Xpress is still consider a prefer lender at Barnard. If we decide to terminate our relationship, we will notify all families immediately.

[/quote]
I don't think there is any allegation of a specific impropriety by the lender itself; my understanding of the Columbia problem is that its financial aid director had an improper conflict of interest because of holding stock in the company.</p>

3

<p>I had no idea what I was doing, and went with Citibank, but it seemed to work out well. At the time I enrolled, they had an automatic 3% of the loan balance removed at your first payment, which was nice. I don't know if they still have that, but according to their website:</p>

<p>"Citibank saves you even more by offering to waive your last six monthly payments when all payments have been made on time -saving you up to 6.00% on your principal loan balance."</p>

<p>So if you're a careful bill-minder, this might be a good way to go. I'd check their policy on paying it off early, though**. And they only give a 1% interest rate deduction at graduation and another .25% if you sign up for autopayments, so calculate carefully to figure out the best option for you.</p>

<p>(or, and don't tell any other economist I said this, just pick whatever's easiest, the difference is going to be tiny after the cost of figuring it out down to the cent)</p>

<p>**Edit: "For example, prepayments may eliminate one or more of the regularly scheduled payments and thus reduce the number of monthly payments which Citibank would waive."
Sneaky. But still, might be a good deal regardless.</p>

4

<p>Here's what the three preferred lenders are currently offering:</p>

<p>Citibank:</p>

<p>1% interest rate reduction at graduation.</p>

<p>0.25% interest rate reduction with automatic payment.</p>

<p>Up to 6% principal reduction with 0 payments for the last 6 months when all payments are made on time.</p>

<p>Free Citibank checking account.</p>

<p>Access Group:</p>

<p>2% interest rate discount after 36 consecutive on-time payments.</p>

<p>0.25% interest rate reduction upon entering repayment with automatic payment withdrawal.</p>

<p>Student Loan Xpress:</p>

<p>2% interest rate reduction upon entering repayment with automatic payment withdrawal.</p>

<hr>

<p>Assuming you sign up for automatic withdrawal, you would save the most money with Student Loan Xpress. If you borrowed $19,000 total (the maximum allowed) and paid the loans off over 10 years, here is what the overall charges would be (best case scenario):</p>

<p>Citibank: $23,561 (Monthly payment $206.67, interest rate 5.55%, paid off in 9 years, 6 months, with last 6 months' payments waived)</p>

<p>Access Group: $24,741.72 (Monthly payment $216.22, interest 6.55% for the first 36 months, payment dropping to $202.41, interest rate 4.55% for remainder of loan)</p>

<p>Student Loan Xpress: $23,392 (monthly payment $218.62 @4.8%, paid off in 8 years, 11 months)</p>

<p>Even though I've figured out the best case scenario, I am wary of promises to reduce interest after X number of on-time payments, because all it takes is one check delayed in the mail and the student loses the benefit of that arrangement -- and I have had issues myself with lenders losing payments or failing to credit them even when I had mailed them on time.</p>

5

<p>what do you know about early payoff options? how easy is it to change your payment plan after you start repayment? currently, my parents want me to borrow the maximum allowed and they say they'll pay it back in full after graduation. is that allowed? or is there a minimum repayment period (for their interest benefits perhaps?) or can they pay it back in one year or so?</p>

6

<p>Yes, you can pay off or pay extra at any time. There is no penalty for early payment. You just send in a check for whatever you want. If you wanted to pay it off in full, you would request a payoff figure from the lender and then mail it in.</p>

7

<p>to be sure, this is true for all loans?</p>

<p>edit:
do you choose a payment plan when you graduate / when repayment starts?</p>