Things to Consider Before Choosing a Student Loan Lender

The Federal Family Education Loan Program (FFELP) includes Stafford and PLUS (parent) loans. Although the federal government specifies the major provisions of these loans, such as how much you are permitted to borrow and what your interest rate will be, there are differences in how lenders process the loans. It is in your best interest to assess the type of service you may expect to receive from your lender. Listed below are some of the lender service considerations you should take into account when choosing a lender to process your Stafford or PLUS loan.

1.  Does the lender offer electronic fund transfer (EFT)  processing through Great Lakes Higher Education Guaranty Corporation? If so, you can expect your loan to be processed electronically and the money transferred directly into your UW-Parkside account. Any refund will be sent automatically to your Higher One Card or bank account, or mailed to you by check, whichever method you chose.

2.  If you are planning to borrow an Unsubsidized Stafford Loan, how often does the lender capitalize interest? Lenders that capitalize interest only once at the beginning of the repayment period will save you money over those that capitalize interest more frequently while you are enrolled in school (such as quarterly or annually).

3.  Does the lender offer online and 24-hour account information and toll free phone numbers to call for advice? Does the lender provide educational materials regarding student loans and debt management?

4.  Is it important to you that your lender has a local presence?

5.  Do you prefer a lender with whom you have a financial history?

6.  Does your lender sell their student loans to a secondary market for loan servicing and collection? If so, are you comfortable working with an organization you may not be familiar with?

7.  Are there interest rate reductions if you sign up for automatic withdrawal from your checking account?

8.  Does the lender offer interest or principle reductions after a certain number of on-time payments?

Borrow wisely and only borrow what you need. Research and choose the best lender for you. You'll be glad you made the effort.

Included here is a list of lenders/banks used most often by UW-Parkside students.  These lenders provide electronic fund transfer (EFT) to ensure faster processing of Stafford Loans and Parent PLUS Loans.