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Guide to Selecting a Lender
Loan Programs

As a new student or parent loan borrower, it is important that you make an informed decision about the lender you would like to use.  You, as the consumer, have the right to choose a lender from a very large pool of Federal Stafford or PLUS Loan providers.  This guide may help as you investigate those options and make your decision.  It is also a good idea to check lenders' websites or contact them directly about any questions you may have about their terms and conditions.

Preferred Lenders

The Office of Financial Aid and Scholarships provides a list of preferred lenders to help you make your decision.  This list is made up of  lenders who have historically provided high levels of service and value to our students and parents.  Students and parents are not required to use one of the preferred lenders, but many choose to do so.  It is important to note that SUNY ESF does not receive any special benefits or "kickbacks" for listing these loan providers as preferred lenders.

For a "side-by-side" comparison of SUNY ESF's preferred lenders, please visit the ELM Select web site here: http://www.elmselect.com

Interest Rates and Other Regulated Loan Features

Certain terms and conditions of Stafford and PLUS Loans are regulated by the Federal Government, including the interest rate, processing fees, and repayment options which must be offered.  As a result, students are encouraged to investigate those features that are not regulated when choosing a lender.  The most common areas of flexibility are interest rate or fee incentives, quality of customer service, and additional repayment options.

Minimum Loan Requirements

All Federal Loans must meet the following requirements:

• All Subsidized Stafford Loans disbursed on or after July 1, 2010 have a fixed interest rate of 4.5%
• All Unsubsidized Stafford Loans disbursed on or after July 1, 2010 have a fixed interest rate of 6.8%
• All PLUS loans disbursed on or after July 1, 2010 have a fixed interest rate of 8.5%
  
• Processing fees (origination and guarantee) can be no higher than 4%, which is automatically taken from the loan amount at the time of disbursement
• Four repayment options must be offered (Standard, Graduated, Income Sensitive or Income-Based, Extended) (Stafford Loans Only)
  

Loan Incentives

Many loan providers will offer various incentives to make their product more attractive to the student or parent.  The most common areas for these incentives are:

• Interest Rate Reductions - rates can often be reduced for students or parents who choose to make electronic payments (online or funds transfer) or those who make a required number of on-time payments.
• Processing Fee Reductions - many lenders will reduce or remove the processing fees associated with their products.  Please note that guarantee agencies may still charge a 1% fee even if the origination fees are cancelled.
• PLUS Loan Payment Deferrals - many PLUS loan providers will allow for a delay in regular payments until after the student has left school.
  

Areas of Interest

The Department of Education recommends researching these areas prior to choosing a lender:

• Ability of lender to service all your loans.
• Interest rates and terms: Although these are very similar for the federal loan programs, some lenders do offer better terms or discounts.
• Loan application processes: Can you apply online? Is instant loan approval offered?
• Repayment plans: some are simple, others complex.
• Benefits for borrowers who pay on time or make loan payments electronically.
• Customer service: Can you reach a live operator quickly to check on the status of your loan during hours convenient for you?

Additional information on these topics and other common questions is available here.

Last updated on March 1, 2010