Choosing a Stafford Loan Lender

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I talked to Chase yesterday and they told me there is a 1.5% origination fee for Stafford and 3% for Grad plus loans. They said the information of the website is not up to date.
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I know Chase is the lender but I believe the loans are originate and serviced by a different company? I think it used to be Great Lakes Education Loan Services, because that it what is said on the MPN. However, my fiancial aid advisor told me that I can't get the loans through Great Lakes, I have to go through American Student Assistance. Chase said that I can't apply for the loans through ASA until May 9th. Is this something specific for my school?
 
To add to the confusion, I just got a letter in the mail from a financial aid office saying that chase will have a 1% origination fee and 1% principal reduction after first scheduled on-time payment. This is for Stafford loans guaranteed on or after June 1st, 2008

Edamerica will have a 1% origination fee for Stafford Loans. There's a 0.25% interest rate reduction w/ auto-debit for the Grad PLUS loans. The tuition solution private loan will no longer be available for international students. This all applies to loans guaranteed on or after May 15, 2008.
 
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I just got off the phone with Chase, and they say there is a 1% origination fee, but they will pay for that on your behalf. same with Grad plus

this might subject to change maybe next month
 
Rikkye said:
I just got off the phone with Chase, and they say there is a 1% origination fee, but they will pay for that on your behalf. same with Grad plus

this might subject to change maybe next month
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I'm not good at this, but can they technically tell you one day that they won't cover the fee anymore?
 
I believe ASA is the guarantor. They basically insure the loan for the lender. The bank (Chase) loans the money to you. In between you and the lender is the servicer (the folks Chase pays to deal with you because they are too busy). In between Chase and the government sits the guarantor who pays the bank (Chase) if you default on the loan out of their insurance pool and then the guarantor gets the funds back from the government. The lender may cover the oigination fees and the guarantor may cover the default fees (pay them for the borrower).
When that happes (default) the governement comes after you to collect the debt.
I'm not sure who Chase uses as a guarantor or if they are in the process of choosing another for this year. They seem to be all over the place but definitely are concentrating on serving schools with grads that will make money (med, dent, law, business) by trying to be more appealing and at the same time trying to minimize their loans to the less appealing markets.
 
RE: Chase....

As far as I can tell (based on a conversation I had with a Chase rep today), there is a varying origination fee schedule based on your loan's date of origination. According the rep with whom I spoke, if your loan originates between 6/1/08 and 6/30/08, there is a 1.5% fee; if your loan originates on 7/1/08 or after, then you'll pay a 1% fee.

There is a 1% reduction in the interest rate at time of repayment which is huge if you plan on extending your repayment period out to 25 years. There was no mention of a rebate at the outset of repayment when I asked about other incentives.
 
So it looks like Chase has their rates up. 5.8%, with a 1% decrease. Should I wait until 6/1 to sign up? This still looks like the best option to me.
 
ToasterThief said:
So it looks like Chase has their rates up. 5.8%, with a 1% decrease. Should I wait until 6/1 to sign up? This still looks like the best option to me.
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But is it a guaranteed benefit? That's the key question for me.
 
tapir said:
But is it a guaranteed benefit? That's the key question for me.
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I'll be shocked if any benefit, other than zero origination fee, is guaranteed.
 
I think everything you are saying depends on the servicer so I don't know what Chase has to do with the origination terms. At Wayne the servicer for the Chase loans is Nelnet.
 
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Anyone have a link to the 5.8% chase website? Thanks!
 
I have an update for those considering Chase. My financial aid advisor recently informed me that Chase will honor the 0% origination fee if your application goes through before June 1. It would be great if someone else could confirm this. She told me that she heard this from a Chase rep.
 
Guile said:
I have an update for those considering Chase. My financial aid advisor recently informed me that Chase will honor the 0% origination fee if your application goes through before June 1. It would be great if someone else could confirm this. She told me that she heard this from a Chase rep.
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Definitely true, this is the best lender program I can find for Stafford Loans.

Only catch is that your school has to participate in the program...which mine doesn't!!!!
 
Lednerg said:
Definitely true, this is the best lender program I can find for Stafford Loans.

Only catch is that your school has to participate in the program...which mine doesn't!!!!
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You can't just apply through the Chase website and have the money sent to your school?
 
Guile said:
You can't just apply through the Chase website and have the money sent to your school?
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You can, but this is a specific program for Stafford Loans for Health Professionals (http://www.chasestudentloans.com/medical/med_stafford.htm) and to get the benefits listed your school needs to be a participant.

Chase is a lender for Staffords for all schools, but the perks aren't the same as they are in the Medical School Student Loan Program.

(actually, any rate reduction is just BS, they can be changed or eliminated at any time, so just find someone that is willing to pay the origination and default fees because that's the only thing you can really count on...if someone would just pay the 3% Grad+ origination fee...)

Hope that makes sense...
 
I have some good news...T.H.E. is lifting their suspension on new loan applications starting May 27th. According to northstar.org :
Exciting News - T.H.E. will begin taking Federal Stafford, Federal PLUS and Federal Grad PLUS applications for the 2008/09 school year beginning Tuesday, May 27th.
 
crashcartqueen said:
I have some good news...T.H.E. is lifting their suspension on new loan applications starting May 27th. According to northstar.org :
Exciting News - T.H.E. will begin taking Federal Stafford, Federal PLUS and Federal Grad PLUS applications for the 2008/09 school year beginning Tuesday, May 27th.
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They're only offering a 0.25% ACH credit during repayment. Chase is still offering a better deal.
 
Has anyone used MEDinvest? It looks like they've got 0% origination and federal default fees on staffords in addition to 1% rebate on the principle upon repayment, 1% after 12 on time repayments, and 1.5% after 24 on time repayments. It seems like a good deal, I'm just wondering if anyone has actually used them in the past and can comment on their reliability, customer service, etc. They haven't been on any preferred lender lists that I've seen and I have to wonder why because their terms look attractive.

http://www.mymedinvest.com/pages/stafford_loan.html
 
When applying for the Chase loan I get "Contact your financial aid office to apply for a Medical Stafford Loan." after choosing my school. Anyone else running into the same problem?

jb!:)
 
jackbauer! said:
When applying for the Chase loan I get "Contact your financial aid office to apply for a Medical Stafford Loan." after choosing my school. Anyone else running into the same problem?

jb!:)
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I had no problems signing up for this loan. Of course, I first told my school to include chase medical loans as a lender. I believe they need the (5?) digit lender code.

Good luck!
 
Does anyone know if the the Stafford Loan rate is expected to drop after July 1, 2008? I know that they adjust the rate every year on July 1st, and due to the recent cuts by the Fed this year, it would make sense that the Stafford Loan rate would also decrease. In this case, is it better to wait to guarantee your loan after July 1st? Thanks!
 
TrojanMikeD said:
Does anyone know if the the Stafford Loan rate is expected to drop after July 1, 2008? I know that they adjust the rate every year on July 1st, and due to the recent cuts by the Fed this year, it would make sense that the Stafford Loan rate would also decrease. In this case, is it better to wait to guarantee your loan after July 1st? Thanks!
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On new loans taken out this year, my sources tell me, with 100% certainty, that rates will not drop this July 1.
 
After e-mailing my school's financial aid counselor about chase, this is what she replied with...

"This is what we have discovered about the Chase loan you referenced. The
1% interest rate reduction sounds good, but since it is not part of the
Stafford Loan MPN, it is subject to change at any time at the whim of
the lender. Also, with ASA as the guarantor, the student is responsible
for the 1% guaranty/default fee (which will be taken off the top of the
loan prior to disbursement).

The set up we currently have in place for Chase is under lender code
808956, with Great Lakes as the servicer and the guarantor, and Great
Lakes is still covering the guaranty/default fee. If you want to use
Chase as your lender, this is the routing we currently have in place."

Sounds like a bunch of smoke and mirrors, in my opinion. Bank of America it is then..

jb!:)
 
I just spoke to my Finanical Aid office she said all of these lenders are changing their benefits - and that Bank of AMerica is changing to 1% orig. fees!

Which lender has 0% now??
 
Just got off the phone with Chase. They said that after June 1st, there will be a 1.5% origination fee on stafford, and 3% origination fee on grad plus loans. She said that you will only recieve 0% origination fees if the money is dispersed before June 1st, and that it was "pretty much imposible to get that since June 1st is Sunday".
 
We just got an email from our finaid office that Chase is reducing their benefits to a 0.25% interest rate reduction for all loans with a guarantee data after June 1.
 
I just went with the flow and signed an MPN with whatever my school provided me, SunTrust. Is there any point in switching?
 
I'm going w/ Student Lending Works. They have a 0% origination and default fee, but I think it may be related to something about their tax-status in Ohio. Incentive is incremental 0.25% reduction, up to 1% after 3 years of repayment. They said that this incentive would not ever be removed (at least for disbursements given out this year, again related to their tax-status in Ohio), but who knows anymore. Anyway, it's a lender to check out for their 0% starting fees
 
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Stuck between two:

Wells Fargo, 0% on origination and default fees on loans guaranteed before 7/1

Citibank, up to 0.75% reduction at repayment and will waive last 6 months if all payments on time

Thoughts?
 
DianaUT06 said:
Stuck between two:

Wells Fargo, 0% on origination and default fees on loans guaranteed before 7/1

Citibank, up to 0.75% reduction at repayment and will waive last 6 months if all payments on time

Thoughts?
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I went to www.finaid.org and they have calculators which are pretty idiot proof that allow you to model out the exact amounts and benefits of each loan you're considering. If you're planning to extend your loans out to 20 or 25 years, interest reductions are a bigger benefit that the 2.5% in one time only fees. But check out your particular situation with the calculator.
 
Ooch said:
I went to www.finaid.org and they have calculators which are pretty idiot proof that allow you to model out the exact amounts and benefits of each loan you're considering. If you're planning to extend your loans out to 20 or 25 years, interest reductions are a bigger benefit that the 2.5% in one time only fees. But check out your particular situation with the calculator.
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Normally this would be true, but it sounds like virtually all lenders are doing away with their incentives. Meaning that even if they tell you now that you will get an interest rate reduction at repayment and you sign the MPN with that incentive promised to you, they can still take it away from you before repayment begins. I don't really understand how this isn't a breach of contract, I guess it's in the fine print that they can do this, but it has happened and with the current loan market, looks like it will continue to happen.

I would go for the one w/ the 0 starting fees if you can find one (see my post about Student Lending Works a couple posts up), and then if they offer an incentive, fantastic. But keep in mind that you won't necessarily get that incentive when repayment begins
 
It's not breach of contract since incentives nor fees are not even listed in the MPN, which I was very frustrated to find out.
 
As the majority of lenders were selling off the loans as securities to raise more cash to make more loans, they all hit the wall when financing in general started to cave with the mortgages. No one wants to buy the securities from the lenders so thus the lenders hit a cash shortfall and have been trying to find ways to raise cash. Recently the Feds decided to bail them out basically by giving them a line of credit kind of and a guarantee that the Feds would buy the loans from the lenders once funded so they'd have cash coming in to make more loans and stay in business. I'm not sure who thought up that brilliant plan.
I'm sure all of you have been utterly confused at the changes on the homepages, the changing fee structure and incentives. The lenders have also decided to concentrate on the big fish: med, dental, who borrow buckets. Why go for the undergrad freshman with a max of $3500 when you can land the borrowers in the $40,000 plus range?
In order for the feds to buy them from Chase, Citibank etc the Feds have to honor the incentives of those lenders. I can tell you the feds are not going to honor the incentives the lenders have offered so the lenders are left with the only logical choice: eliminate all but the .25% rate reduction for auto debit payments which is what the feds (through the Direct Lending program) offer so the feds will buy the loans and give the lenders more cash to keep lending. The last poster was correct in the fact that the Master Prom Note doesn't have a mention of incentives: the language is mandated by law since this is a federally funded, taxpayer supported program and all the lenders must adhere to the specifics of the loan note--they are all the same: terms, rates and conditions. Any incentive is on the side, outside the loan note which is the legally binding part of the contract you sign with the lender and subject to elimination of the lenders profits take a hit.
I admittedly haven't quite figured out who your lender would be if sold to the Feds but will let you know when I figure it out. I suspect they simply become Direct Loans at that point. I'm totally biased and don't see that as a bad thing but I seem to be in the minority amongst my colleagues who are all convinced you want "choice" but can't seem to figure out you really don't know what you are shopping for in the first place (and neither do they as far as I'm concerned given this latest mess). When I mention it I get a slap on the nose from the FA "rock stars" who are seen as the "experts" in my field. Perhaps you all should encourage your FA folks to read this thread to show them all the anxiety being caused? Just a thought.
 
DrBowtie said:
It's not breach of contract since incentives nor fees are not even listed in the MPN, which I was very frustrated to find out.
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The MPN is worthless. It doesn't have anything besides your name, lender name, references and signature. It doesn't even list the interest rate or how much you're borrowing!! I was told by all of my financial aid counselors that my repayment benefits, which I should base my lender selection on, couldn't be revoked. My financial aid counselor still doesn't believe THE took it away. She said "It doesn't matter if it's not on the MPN, no details are there except your promise to repay the loan."

I do believe it's a breach of contract. It might not be written down on the MPN, but the student loan contract implies a lot of things without explicitly stating it.

I can't believe we have such poor regulatory oversight by the government on student loans. I can't believe we have such a sucky government that we even have to deal with huge amounts of student loans.
 
So i Just found out Bank of America has a 1% orig. fee. starting july.

Does anyone know of any lenders available to everyone that have 0% Origination fees and default fees??

All of the lenders on my schools list have at 1% fees and some have .5% default.

Thanks for the help!
 
Wachovia and SNB (Bank of Wichita) both seem to have zero origination fees and might be worth looking into. I'm still shopping around, but am leaning toward Wachovia. I've used them in the past and their customer service is pretty good.
 
Did some calling today and here is what I came up with for Stafford loans:

Wachovia, Chase, SallieMae, and Access are all the same for loans dispersed after July 1, 2008: 1% origination fee, .25% interest rate deduction for automatic debit during repayment.

The only one with any other incentives from my lender list was Citibank, which also has a 0.5% principal deduction when you start payment, and the last 6 months are waived if all your payments are on time. ...give or take I think that will be about 6 thousand dollars difference when it is all said and done for the full stafford amount (counting interest and all that good stuff).
I also talked to a Citi manager about the bank's ability to take away incentives before the repayment period if they want, and she said that Citi does not, or has not, ever done that, they only stop offering the incentives for the future.

Since citi is the only one with additional incentives, it seems like the way to go... anybody find anything different?
 
We got 0% origination from National City - just signed the MPN last week.
 
Just called CitiBank - they have a 1% Origination fee as well.
National City's website states 6% with no Origination fees, but max of 3,500 (might just be for undergrads)

Did they say if they loan had to be dispersed by a certain date to ensure the discount? And what total amount are they letting you borrow? Thanks.

Anybody else find any 0% origination fee lenders? Right now, I would be happy just to have that!
 
Stafford subsidized
1% orig., 1% default (may be subsidized by gaurentor), 1% off orig. principle after 1st 12 payments, 0.25% auto pay reduction (don't have to have a US Bank account to qualify)

Everyone out there...MPN's now at 0% orig. fee make little difference now if it only applies to monies dispersed before July 1st (Wells Fargo comes to mind)
 
k12balla said:
Just called CitiBank - they have a 1% Origination fee as well.
National City's website states 6% with no Origination fees, but max of 3,500 (might just be for undergrads)

Did they say if they loan had to be dispersed by a certain date to ensure the discount? And what total amount are they letting you borrow? Thanks.

Anybody else find any 0% origination fee lenders? Right now, I would be happy just to have that!
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It's 6.8%, and I'm able to borrow up to the stafford max. No disbursement deadlines for the 0% origination fee were indicated.
 
DDS Nuke said:
Stafford subsidized
1% orig., 1% default (may be subsidized by gaurentor), 1% off orig. principle after 1st 12 payments, 0.25% auto pay reduction (don't have to have a US Bank account to qualify)

Everyone out there...MPN's now at 0% orig. fee make little difference now if it only applies to monies dispersed before July 1st (Wells Fargo comes to mind)
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Yep. I signed my MPN before June 1 for Chase and still got the 1% since the funds were going to be processed after the date.
 
DrBowtie said:
Yep. I signed my MPN before June 1 for Chase and still got the 1% since the funds were going to be processed after the date.
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Well that's a bummer, because I was under the impression you just had to get everything submitted (and your school's fin aid office had to do their part) by June 1 to be released from the 1% origination fee. My school's fin aid rep even talked to a Chase rep.

But we still get the 5.8% interest at graduation and 1% principal credit (if the origination fee is charged), right?? (I've heard the answer is no.) :(
 
Guile said:
Well that's a bummer, because I was under the impression you just had to get everything submitted (and your school's fin aid office had to do their part) by June 1 to be released from the 1% origination fee. My school's fin aid rep even talked to a Chase rep.

But we still get the 5.8% interest at graduation and 1% principal credit (if the origination fee is charged), right?? (I've heard the answer is no.) :(
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I'm guessing no. I'm guessing the incentives will be what they are at the time of graduation. Maybe the lending market will swing back and they'll return to 1% reduction.
 
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