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Suggested Lenders
There are many student loan lenders available to students (Federal Stafford loans) and parents (Federal PLUS loans). How do you choose? Here are some factors to consider:
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For sure is better than maybe.
- Whatever fee or interest rate reduction the lender is offering, are you going to definitely get that benefit or only if you do something in particular, such as make a certain number of on-time payments? What percentage of borrowers actually qualify for each of the lender's benefits? And when you are in repayment, does the lender keep your loan while you are in repayment or sell it to another loan company?
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Sooner is better than later.
- When do you receive the benefits? If a lender waives the upfront fees, you receive the full amount of the loan when it is disbursed to the college. If the benefit is when you are in repayment on your loan, how many consecutive, on-time payments do you need to make before receiving the benefit? And what happens to that benefit if you are a few days late with a payment?
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More is better than less.
- With all the borrower benefits offered by the lender for which you qualify, how much money would you save if you borrowed $10,000 from that lender?
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Other factors.
Some students and parents have told us about other factors they consider when selecting a student loan lender:
- Is the lender a for-profit lender or a non-profit (non-profits frequently put funding into non-loan programs to help with college planning and financing). Does the lender's organization offer other programs that help student and families with going on to college?
- What is the lender's level of customer service? Does the lender actively contact you when there is a potential problem, or wait to hear from you? Can you easily get information over the phone or on-line?
- How easy is the application process? Does the lender have an on-line master promissory note with electronic signature ("e-sign")?
- We are asked what lender our students choose most often. Historically, this has been the Vermont Student Assistance Corporation, but we encourage you to compare the benefits of all three suggested lenders and any others in which you are interested.
Vermont Technical College, as a member of the Vermont State College system, annually evaluates these and other factors to develop a suggested list of lenders for your consideration. For the 2008-09 academic year we evaluated over 15 regional and national lenders and selected three as our suggested lenders based on the excellence of their benefits and customer service.
We have compiled a List of Suggested Lenders in a table that shows how they compare.
You are not limited to selecting from the suggested lenders. You have the right to select any lender you choose and will not cause unnecessary certification delays. Simply provide the lender identification number, name and address to our office.