I've been "awarded" the standard 20,500 combo of subsidized and unsubsidized loans for my first year. I'll likely be taking out the full $20,500 (and possibly more through a PLUS loan if needed...that is still to be determined though).
On my school's financial aid website, it says I must accept or decline each of the two loans for the upcoming year. In accepting, I am to select my lender and that is where I have a question.
The lender options are as follows:
Federal Direct Loans:
---Default Fee: n/a
---Origination Fee: 2% (less 1.5% after disbursement)
---Total Fees: 0.50%
---Borrower Benefits: 0.25% reduction for auto-debit
AccessGroup:
---Default Fee: 0%
---Origination Fee: 1%
---Total Fees: 1%
---Borrower Benefits: 0.25% reduction for auto-debit
Bank of America:
---Default Fee: 0%
---Origination Fee: 0%
---Total Fees: 0%
---Borrower Benefits: 0.25% reduction for BofA customers
CoreFirst:
---Default Fee: 0%
---Origination Fee: 1%
---Total Fees: 1%
---Borrower Benefits: 0.25% reduction for auto-debit
US Bank:
---Default Fee: 0%
---Origination Fee: 0%
---Total Fees: 0%
---Borrower Benefits: 1% credit of original principal after 12 consecutive on-time payments
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We are allowed to use other lenders if we chose, but these are the ones listed so I figured I might as well start with these.
My understanding is that Stafford (whether subsidized or not) are all at a fixed rate of X percent and that rate won't vary among lenders... only with the reductions for things like auto-debit, etc...
So my question is this: Why would anyone pick any lender other than USBank or Bank of America, given these choices?!? Isn't it clear that these two offer the best deals, making the coice simple?
I thought the easiest and most cost-effective loan would be straight through the fed (via the first option listed) but that seems to not be the case with their various fees.
If someone could clear this up, I'd be very grateful. Thanks!
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