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College Students and Recent Grads Study: College Students Face High Interest Rates on Student Credit Cards

Paying with credit card

It is that time of year: millions of students will be heading to college. For many students, this will be the first time that they will be the targets of banks’ marketing departments.

While the CARD Act changed how lenders can offer college students credit cards, young adults are still able to acquire these potentially expensive products. A study of college student credit cards by shows that a student new to credit is likely to pay an average APR of 21.4%. And taking out cash is even more expensive, with an average APR of 24.1%.

  • We reviewed the Top 50 banks in the US by deposits
  • We reviewed credit cards specifically targeting students and actively marketed on the banks’ websites
  • All credit cards, with the exception of Capital One Journey, offer a range of Purchase APRs. CapitalOne offers a single, flat APR of 19.8%
  • For credit cards that offer a range of APRs, the average range is nine percentage points
  • The lowest possible APR is 10.99%, offered by Bank of America on the BankAmericard Credit Card for Students

Note: Bank of America charges higher APRs on student products that earn rewards. A no rewards card has a range of 10.99% – 20.99%. The cash rewards card has a range of 12.99% – 22.99%. The travel rewards card has a range of 14.99% – 22.99%. Remember: rewards can be very expensive!

  • The highest possible APR is 23.99%, offered by Citi (both the ThankYou Preferred for College Students and Dividend Platinum Select Visa for College Students)
  • If your student credit card is your first credit product, then you will likely have no score. No score means you are the highest risk, and it is highly likely that you will receive the highest price point. The average of the highest price points is 21.4%

If a student charges $1,000 on a credit card and only pays the minimum due at the average rate of 21.4%, it will take 7.6 years to pay back the debt. And the total amount repaid would be $1,941.

Noticeably absent from the list of banks offering credit cards that target students are American Express and Chase. Chase recently exited the business, recognizing that earning interest rates more than 20% on students still in college didn’t feel right.

The CARD Act restricted, but certainly did not eliminate, credit cards that target students. In 2012, applications for student credit cards were at 43.5% of 2007 levels. The CARD Act put the following restrictions into place:

  • No pre-approved offers to people under 21, without consent
  • If you are under 21, you need to prove that you have income (a part-time job, for example), or have a cosigner older than 21
  • Credit card companies can no longer give out free gifts on campus to induce people into signing up for a credit card. No more frisbees or beer mugs

However, there are still plenty of student credit card offers out there. While they don’t give out frisbees, they do offer sign-on bonuses. Citi, for example, gives you 2,500 Thank You points if you spend $500 within 3 months of opening the card. We find that worse than the free frisbee. Before, they would incent you to open a card. Now they are incenting you to spend on the card!

While credit cards can be a great way to build your credit while in college, they can turn into expensive traps that send you down a dangerous path.

The only reason you should apply for a student credit card is to build your credit score. And follow these three tips:

1.Your statement balance should never be more than 30% of your limit. High utilization, early in your credit history, can have a meaningful negative impact. So, just make one to two purchases a month on the card.

2.Pay your balance in full. Credit cards are expensive, and you should not use them to borrow.

3.Never use a credit card for a cash advance. It may seem like easy money, but you will be paying for it.

Have questions for us? Get in touch via TwitterFacebook, email or in the comment section below!

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College Students and Recent Grads, Student Loan ReFi

Decoding the Reducing Educational Debt (RED) Act

Decoding the Reducing Educational Debt (RED) Act

We have a massive problem in our country: student loan debt. Clocking in at over $1.2 trillion, it has been assessed as the next market bubble, and a massive detriment to the personal finances of the millennial generation.

Some policymakers have recognized the issue, and taken initiative to fight against it. On January 21, 2016, a coalition of Senate Democrats announced their newest proposal: the Reducing Educational Debt Act, or RED Act. The act contains versions of a series of bills that have previously been proposed, but not enacted.

America’s College Promise Act

When President Obama called for educational reform via tuition-free community college during his 2015 State of the Union address, Senator Tammy Baldwin of Wisconsin took action. She proposed America’s College Promise Act, which is now included as a part of the three-pronged RED Act.

This version of the legislation would provide federal funding to states that made free community college a priority. For every $1 the state set aside for community college tuition waivers, the Federal government would contribute $3. This money would only go to eligible students, and would be applied before any other aid.

Currently, those who qualify for the maximum award level of the Pell Grant are largely able to go to community college without paying for tuition out of pocket. Oftentimes, though not always, the maximum award is sufficient to not only cover tuition and fees, but also books, and a marginal amount of living expenses.

This portion of the RED Act would also provide funding to Historically Black Colleges and Universities, along with other Minority Serving Institutions, to ensure that low-income students have enough funding to cover their first two years of attendance.

Bank on Students Emergency Loan Refinancing Act

In June of 2014, Senator Elizabeth Warren’s Bank on Students Emergency Loan Refinancing Act was turned down in the Senate. Not one to give up on the issue, the Massachusetts senator’s legislation is featured prominently in the RED Act.

This portion of the proposed act would allow those with student loans to refinance through the Federal government. It would allow eligible individuals carrying FFELP and Direct student loans initiated prior to 2010 to refinance at the 2013-2014 school year rate: 3.86%. Those who borrowed through the Federal government between the years of 2006-2009 were subject to rates between 6.0%-6.8%.

Those with private student loans would also be able to refinance through the Federal government. They would be able to do so at whatever current rates were at the time of refinance. For the 2016-17 school year, that rate is 4.29%.

Currently, you are able to refinance through financial institutions in the private sector, but not through the Federal government. Those in good standing with a high credit score may be able to get rates as low as 3.50% in this way today, though they have to be discriminating when making this decision.

Refinancing Federal student loans in the private sector may put them at risk of losing the benefits of certain federal programs, like deferment and PAYE.

Pell Grant Legislation

In 2015, Senator Mazie Hirono of Hawaii proposed a series of bills that would protect and strengthen the Pell Grant both immediately and long term. Aspects of some of those bills have been integrated into the RED Act.

Currently, Pell Grants are funded largely through discretionary spending, with a small portion of the funding coming from a mandatory add-on. In general, Republicans have a history of trying to cut Pell Grant funding, while Democrats have a history of trying to stabilize and raise it. The Health Care and Education Reconciliation Act expanded funding short-term, adjusting the maximum Pell Grant award to inflation for the years 2013-2017.

Sen. Hirono’s bill aims to extend the adjustment for inflation, making it a built-in part of the mandatory add-on, rather than leaving it up to debate as a part of discretionary spending. It also aims to protect the inflationary adjustment so it cannot be deliberated every time Congress sits down to evaluate the Pell Grant.

Keep Up On the RED Act

Want to follow this act as it makes its way through the legislative process? Follow #IntheRED on social media to get the latest news and opinions.


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College Students and Recent Grads, Reviews

Review: Navient Student Loan Servicer

Review: Navient Student Loan Servicer

Navient’s company name is new, but its services are not. In 2009, Sallie Mae began servicing Federal student loans on behalf of the Department of Education, and in 2014, Navient separated from Sallie Mae to continue as the loan manager branch of the company.

It helps 12 million customers with their federal and private student loans. If you’re one of those customers, continue reading to find out what Navient offers, and how you can resolve a dispute if a problem arises.

Overview of Navient

Navient claims its customers “default at a rate 30 percent better than the national average” because it provides a wide range of financial tools on its site. Let’s see if it lives up to that claim.

First, Navient offers a “Protect Yourself From Fraud” section, which is great to see from a student loan servicer. Lately, many student loan debt relief scams have been making the rounds. These third-party companies offer to lower your debt, get your debt forgiven, or enroll you in a different repayment plan – all of which you can do for free with the help of your servicer. Navient does a good job of explaining what you need to be aware of and how you can avoid getting scammed.

[Learn more about student loan debt relief scams here]

There’s also a section on renewing Income-Driven Repayment Plans, which is important to know if you’re enrolled in one. You don’t have to fully re-apply each year, but to stay enrolled, you need to provide the Department of Education with updated paperwork “certifying” your family size and income. Navient gives you all the details you need, including how to renew and what documents you need. Some borrowers aren’t aware they need to go through this process and may temporarily lose access to the Income-Driven Repayment plan because they fail to send in the necessary paperwork.

[How to set up an income-driven repayment plan]

If you’re experiencing financial difficulty, Navient has an entire section on what you can do if you’re having trouble paying. This includes a list of options for both federal and private borrowers, and contact numbers for Navient so you can talk to a representative about which option is best for you.

One of the most frustrating things to deal with as a borrower is how your payments are applied to your loan. Navient breaks this down depending on what type of loan you have, and if you have a single loan or multiple loans. There’s a section for federal and private loans.

Along with these articles pertaining to repayment of your student loan debt, Navient offers brochures of financial tips you can use to manage your money while paying off your debt. It offers helpful money management tips, strategies to help you save more, a budget worksheet, and a financial goal worksheet, both of which you can fill out. Additionally, Navient has partnered with EverFi to provide an educational course called “The Navient Path to Success!” that customers have access to.

Navient also has a very user-friendly website. It’s extremely easy to navigate and the information is presented in a clear way.

What Borrowers Are Saying

Navient has a few customer testimonials on its website, but those are curated. If you’re looking for real opinions, you might want to check the BBB, or reviews from bloggers who have Navient as their student loan servicer.

A customer posted a review on Consumer Affairs explaining that Navient had sent out two consolidation packets and mixed the names and addresses up. She received someone else’s packet, and that person had her husband’s. Highly sensitive information was contained in the packets, and upon calling the Fraud Department at Navient, she found the number wasn’t working.

Not surprisingly, others report having issues only after Navient took over from Sallie Mae. Many borrowers were paying their loans down with Sallie Mae without a hitch, but when Navient took over, payments didn’t get processed properly. In some cases, payments also weren’t getting automatically withdrawn when borrowers signed up for autopayment.

The BBB website shows 2,006 complaints closed within the last three years, with 787 of those closed within the last 12 months. By far, the most common issue borrowers cite is billing and collections, with over 1,300 complaints filed there. The runner up is problems with the product or service, with over 600 complaints filed.

One borrower said he called Navient to ask about the public service loan forgiveness program and a representative responded that they couldn’t help with that or “reconsolidation.” (Meanwhile, the website says to call to change your repayment plan.) There are additional complaints about payments not showing up. Some borrowers have had to provide proof of payment, and Navient has insisted that they didn’t pay, or have taken an extended period of time to apply payments.

There’s also the fact that the government sued Navient for overcharging on interest, specifically to service members. These borrowers are entitled to a 6% interest cap for loans taken out before their service begins, and Navient was ignoring the cap.

How to Resolve a Dispute With Navient if You Have Federal Student Loans

Borrowers with federal student loans must first go through Navient before they can enlist the help of the Student Aid Ombudsman Group (information below). It’s clear from some of the complaints filed by borrowers that you might want to ask to speak to a supervisor if the representative isn’t helping you.

If you’re not 100% sure what the cause of your problem is, Navient has quite a bit of information on its website, and you should try researching your question there first. Once you have a basic understanding of what should be happening, call customer support and explain your issue. Make sure you keep a pen and paper handy so you have a record of your communication.

If you aren’t satisfied with the representative’s answer, ask to speak to a manager, or try calling back to speak with a different representative. It’s unfortunate you might get better results this way, but it’s worth trying to get your issue resolved quicker.

Depending on the type of loan you have, you’ll have to call or write to a different address. Navient has its contact information listed here.

For federal loans with the U.S. Department of Education, call 800-722-1300 or write to:

Navient U.S. Department of Education Loan Servicing
P.O. Box 9635
Wilkes-Barre, PA 18773-9635

Note – this is the address for general correspondence, so don’t send payments there! You can also fax documents to 866-266-0178.

Additionally, Navient says it’s active on various social media platforms, and you can try making your issue known there. Just be sure to follow the guidelines Navient has set, otherwise your post may be deleted.

Before taking any action, you should look at this list of common problems student loan borrowers face. The Department of Education put this together, and it may help if you’re trying to figure out what steps you need to take before contacting customer service.

Getting Help From the Student Aid Ombudsman Group

Before going to the Student Aid Ombudsman Group, you need to have the proper documentation and proof that you’ve been corresponding with Navient. Think of it like preparing for a court case (only a little less serious) – you want to have everything you need to present your case to the Ombudsman.

Thankfully, the Department of Education has a few documents to help you with this. In fact, you must complete this checklist before contacting the Ombudsman. It’s easy to understand, and will help direct you to a solution if it can be resolved without the help of the Ombudsman.

Once you’re ready, you have a few choices as to how you contact the Ombudsman. The easiest way is to fill out this online form at the Department of Education’s website. That page also lists the contact information for the Ombudsman, which is as follows:

Phone: 1-877-557-2575
Fax: 202-275-0549

Address: U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144

One last word about the Ombudsman – your representative will not immediately side with you. The Ombudsman’s job is to get to the bottom of the dispute and to ensure there’s enough documentation provided by both sides to reach a resolution. The Ombudsman is more of a mediator than an advocate. If she finds that Navient is in the wrong, then she’ll assist you in rectifying the situation, but don’t assume that’s what will happen.

How to Resolve a Dispute With Navient if You Have Private Student Loans

The Consumer Financial Protection Bureau takes complaints from borrowers with private student loans. It’s similar to the Student Aid Ombudsman Group, as it will try to get an answer from Navient on your behalf. However, the CFPB has been taking action to crack down on misbehavior by private student loan lenders and servicers, so your complaint will be taken into consideration.

While you can go to the CFPB immediately, if you’d like to try and contact Navient before escalating the issue, you can find the contact information on this page by scrolling down.

Otherwise, all you need to do is fill out a five-step complaint form with the CFPB online. You can also give the CFPB permission to use your complaint on so others are aware of the issue you’re experiencing.

Once you’ve completed the form, your complaint will be forwarded to Navient, and the CFPB will issue a tracking number to keep you updated on the status of the issue. It shouldn’t take longer than two weeks to hear back, but set your own reminders so you don’t forget to check in.

Keep Communication Open With Navient

All student loan servicers have their faults, but no matter what, they’re the ones servicing the loans. As a borrower, it’s your job to keep in contact with Navient. Miscommunication happens, and as a consumer, you must look out for yourself. Check your free credit reports ( three times a year to ensure nothing is being reported incorrectly by Navient, and always stay on top of your transactions so you know if a payment hasn’t gone through. The sooner you contact a representative about an issue, the quicker it can get resolved.


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College Students and Recent Grads, Pay Down My Debt

19 Options to Refinance Student Loans – Get Your Lowest Rate

19 Options to Refinance Student Loans - Get Your Lowest Rate

Updated: February 5, 2016

Are you tired of paying a high interest rate on your student loan debt? Are you looking for ways to refinance student loans at a lower interest rate, but don’t know where to turn?

Below, you’ll find the most complete list of lenders currently willing to refinance student loans. You can also go directly to our comparison tool, which lets you see student loan terms all at once, with no need to give up personal information.

But before you do that read on to see if you are ready to refinance your student loans.

There is good news: in recent years, the student loan refinancing market has started to come back. Not just with traditional banks, credit unions and finance companies, but even the addition of new businesses that specialize in refinancing student loan debt.

Loan approval rules vary by lender. However, all of the lenders will want:

  • Proof that you can afford your payments. That means you have a job with income that is sufficient to cover your student loan and all of your other expenses.
  • Proof that you are a responsible borrower, with a demonstrated record of on-time payments. For some lenders, that means that they use the traditional FICO, requiring a good score. For other lenders, they may just have some basic rules, like no missed payments, or a certain number of on-time payments required to prove that you are responsible.

If you are in financial difficulty and can’t afford your monthly payments, than a refinance is not the solution. Instead, you should look at options to avoid a default on student loan debt.

This is particularly important if you have Federal loans.

Don’t refinance Federal loans unless you are very comfortable with your ability to repay. Think hard about the chances you won’t be able to make payments for a few months. Once you refinance, you may lose flexible Federal payment options that can help you if you genuinely can’t afford the payments you have today. Check the Federal loan repayment estimator to make sure you see all the Federal options you have right now.

If you can afford your monthly payment, but you have been a sloppy payer, than you will likely need to demonstrate responsibility before applying for a refinance.

But, if you can afford your current monthly payment and have been responsible with those payments, then a refinance could be possible and help you pay the debt off sooner.

Is it worth it? 

Like any form of debt, your goal with a student loan should be to pay as low an interest rate as possible. Other than a mortgage, you will likely never have a debt as large as your student loan.

If you are able to reduce the interest rate by re-financing, then you should consider the transaction. However, make sure you include the following in any decision:

Is there an origination fee?

Many lenders have no fee, which is great news. If there is an origination fee, you need to make sure that it is worth paying. If you plan on paying off your loan very quickly, then you may not want to pay a fee. But, if you are going to be paying your loan for a long time, a fee may be worth paying.

Is the interest rate fixed or variable?

Variable interest rates will almost always be lower than fixed interest rates. But there is a reason: you end up taking all of the interest rate risk. We are currently at all-time low interest rates. So, we know that interest rates will go up, we just don’t know when.

This is a judgment call. Just remember, when rates go up, so do your payments. And, in a higher rate environment, you will not be able to refinance to a better option (because all rates will be going up).

We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.

Places to Consider a Refinance

If you go to other sites they may claim to compare several student loan offers in one step. Just beware that they might only show you deals that pay them a referral fee, so you could miss out on lenders ready to give you better terms. Below is what we believe is the most comprehensive list of current student loan refinancing lenders.

You should take the time to shop around. FICO says there is little to no impact on your credit score for rate shopping as many providers as you’d like in a 30 day period. So set aside a day and apply to as many as you feel comfortable with to get a sense of who is ready to give you the best terms.

Below we highlight the student loan refinance companies that offer the lowest interest rates.

  • SoFi*: Fixed interest rates start as low as 3.50%, and variable rates start as low as 2.13%. SoFi offers student loans to borrowers who graduated from a selection of Title IV accredited colleges and universities. You need to be employed, or have a job offer with a start date in 90 days. You also must be able to demonstrate a strong cash flow. To get the lowest rate, you need to sign up for automatic payments.
  • Earnest*: Earnest offers fixed interest rates starting at 3.50% and variable rates starting at 2.13%. Unlike any of the other lenders, you can switch between fixed and variable rates throughout the life of your loan. You can do that one time every six months until the loan is paid off. That means you can take advantage of the low variable interest rates now, and then lock in a higher fixed rate later. You need to have a job or an employment offer. You need an emergency fund of at least one month. You also must have a positive bank account balance and a budget that makes sense. If you have had credit in the past, you need a history of on time payments.
  • CommonBond*: CommonBond offers fixed rates from 3.50% and variable rates from 2.13%. You need a degree, a job and a stable cash flow. They will also review your payment history with other lenders. CommonBond is now available to students with both graduate and undergraduate degrees. There is no maximum loan amount.
  • LendKey*: LendKey works with community banks and credit unions across the country. Although you apply with LendKey, your loan will be with a community bank. They have recently become very competitive on price, introducing a 3.25% fixed-rate 5 year loan. Variable rates start as low as 2.13%.
  • DRB Student Loan*: DRB offers a variable APR range from 1.90% – 4.78%. Their fixed APR ranges from 3.50% – 6.75%. This is bank that started expanding aggressively into student loans two years ago, and has already booked over $950 million of student loans. If you do not sign up for automatic monthly payments, your rate will be 0.25% higher.

Below is an alphabetical listing of all providers we have found so far. This list includes credit unions that may have limited membership. We will continue to update this list as we find more lenders. (If you are counting, there are now more than 19 providers. Our list has continued to expand since we first created this post.)

  • Alliant Credit Union: In order to qualify, you need to have a bachelor’s degree. The minimum credit score is 700, and you need two years of employment and a minimum income of $40,000. They offer variable interest rates, starting at 6%. Anyone can join this credit union by making a $10 donation to Foster Care for Success.
  • Citizens One (Citizens Bank): To get the best deal, you should have at least a bachelor’s degree. They will look at your credit history, and want to make sure that at least the last three payments on your student loans have been made on time. If you don’t have your degree, you need to have made the last 12 payments (principal and interest) on time. You must make at least $24,000 per year. They offer fixed rates starting at 4.74% and variable rates from 2.33%.
  • CommonBond*: CommonBond was highlighted earlier in this post, with fixed and variable rates available. Variable rates start at 2.13% and fixed rates start at 3.50%.
  • CommonWealth One Federal Credit Union: Variable interest rates start at 3.04%. You can borrow up to $75,000 and need to be a member of the credit union in order to qualify.
  • CordiaGrad: Fixed rates range from 3.95% to 6.75% APR and variable from 2.75% to 4.95% APR. The lowest range is only available if you sign up for an automatic payment from a CordiaGrad Checking Account. You must have at least $20,000 of debt.
  • Credit Union Student Choice: This is a tool offered by credit unions. The criteria and pricing vary by credit union. The credit unions have limited membership, but you can find out if you qualify on this site.
  • LendKey*: You will need to have graduated from an eligible school in order to qualify. You need to make at least $2,000 per month, and they will review your credit history. Variable rates are available, starting at 1.93%. You will be matched with a community bank or credit union that anyone can join.
  • DRB Student Loan*: They will refinance undergraduate, Parent PLUS and graduate loans including MBA, Law, Medical/Dental (Post Residency), Physician Assistant, Advanced Degree Nursing, Anesthetist, Pharmacist, Engineering, Computer Science and more degrees. Variable rates as low as 1.90% with a rate cap and 3.50% fixed.
  • Earnest*. They will look at alternative criteria to try and approve you for a lower rate, like your employment history or bank account balances. Variable rates as low as 2.13%.
  • Eastman Credit Union: They don’t share much of their criteria publicly. Fixed rates start at 6.5% and you must be a member of the credit union. Credit union membership is not available to everyone.
  • EdVest: They offer refinancing options for private loans used to finance attendance at a Title IV, degree-granting institution. If the loan balance is below $100,000 you need to make at least $30,000 a year. If your balance is above $100,000 you need to make at least $50,000. Variable rates start at 3.580%, and fixed rates start at 4.40%.
  • Education Success Loans: You must be out of school for at least 30 months, and you must have a degree. You also need a good credit score, with on-time payment behavior. Variable and fixed loan options are available, with rates starting at 4.99%.
  • IHelp: This service will find a community bank. Community banks can actually be expensive. You need to have 2 years of good credit history, with a DTI (debt-to-income) of less than 45% and annual income of at least $24,000. Fixed rates are available, starting at 6.22%.
  • Mayo Employees Credit Union: You need at least $2,000 of monthly income and a good credit history. Variable rates are available, starting at 4.75% and you would need to join the credit union.
  • Navy Federal Credit Union: This credit union offers limited membership. For men and women who serve, the credit union can offer excellent rates and specialized underwriting. Variable interest rates start at 3.51%.
  • RISLA: You need at least a 680 credit score, and can find fixed interest rates starting at 4.49% if you use a co-signer.
  • SoFi*: You must have a bachelor’s or graduate degree in order to apply, and you must have demonstrated on-time payment behavior. Both fixed and variable rates are available, with rates starting at 2.13% and fixed rates starting at 3.5%.
  • Upstart*: You need to have a degree (or be graduating within 6 months). A minimum FICO of 640 is required. Fixed interest rates starting at 4.67%. This is more of a traditional personal loan than a long term student loan refinance.
  • UW Credit Union: $25,000 minimum income required, with at least 5 years of credit history and a good repayment record. Fixed and variable interest rates are available, with variable rates starting at 3.51% and fixed rates starting at 7.49%. You need to join the credit union in order to refinance your loans.
  • Wells Fargo: As a traditional lender, Wells Fargo will look at credit score and debt burden. They offer both fixed and variable loans, with variable rates starting at 3.49% and fixed rates starting at 6.74%. Wells Fargo does not have a tradition of being a low cost lender.

You can also compare all of these loan options in one chart with our comparison tool. It lists the rates, loan amounts, and kinds of loans each lender is willing to refinance.

Don’t forget to follow us on Twitter @Magnify_Money and on Facebook.

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College Students and Recent Grads, Reviews

Review: Oklahoma Student Loan Authority (OSLA) Servicing

mortar board cash

Oklahoma Student Loan Authority (known as OSLA) Servicing is a not-for-profit company that began servicing federal loans in July 2012.

The U.S. Department of Education transferred Direct Loans that were previously assigned to the Direct Loan Servicing Center (ACS) and in repayment status to OSLA. It also services FFELP loans.

Overview of OSLA Servicing

At first glance, OSLA’s website looks a bit outdated. It’s not as user-friendly as some of the other federal loan servicers. That doesn’t mean there isn’t useful information contained on the site.

One of the first things you might notice at the top of the page is the alert: “Approach with caution 3rd party debt relief offers.”


This links to a valuable blog post the U.S. Department of Education wrote on the subject, which we’ve also covered. In short, if you’re contacted by a third party company offering to relieve you of your student loan debt burden for a fee, walk away. You can do everything they’re offering you on your own for free.

As you can see, right above that notice is a tip on how to identify what type of loan you have. OSLA primarily services Direct Loans, but it also services FFELP loans, which have a separate login page. The Direct Loan login is right underneath that warning.

If you’re looking for any type of form for your student loans, OSLA has one page for all of them. This includes forms to request a certain repayment plan, to apply to an Income-Driven Repayment Plan, to request forbearance or deferment (there are different forms for each reason), and to request forgiveness or discharge. There are also two separate forms specifically for FFELP loans as well. It’s nice to have the forms located on one page so you don’t have to search around on the U.S. Department of Education website for them.

[How to Set Up an Income-Driven Repayment Plan]

OSLA has some information on Public Service and Teacher Loan Forgiveness here, so you can see which requirements you need to meet before applying.

What Borrowers Are Saying

OSLA has a customer service satisfaction survey on its site, although it doesn’t provide the number of people surveyed or how the results were received.


For the most part, borrowers surveyed said the customer service they received was either good or excellent.

How do actual reviews compare? There aren’t many out there compared to the other student loan servicers.

There are two Better Business Bureau profiles, one for OSLA Student Loan Servicing and one for Oklahoma Student Loan Authority. The first has 13 complaints closed with the BBB in the last 3 years, 2 of which were closed in the last 12 months. The second has 2 complaints in the last 3 years, none of which were in the past 12 months.

Only 3 complaints are written out, and all pertain to payments not being credited to the account. In all cases, OSLA communicated with the borrower, and admitted when it was at fault. In the first case, a borrower’s account showed as delinquent even though she had sent the payment in. Unfortunately, OSLA misinformed her as to which payment was missing, and there was confusion on both ends until the payment was traced and posted.

In the second instance, the borrower mailed the payment to the incorrect address, and also had the incorrect account number associated with the payment. OSLA assumed her loans had been transferred and that she was using her previous servicer’s information. In cases like this, OSLA states it takes 60-120 days to retrieve the original payment because it has to be routed through the US Treasury Department and the Department of Education.

In the third case, OSLA was at fault, as they neglected to post a payment for the borrower. He had to call a second time to request that the payment be processed, and OSLA responded that it was posted in June (even though the payment was originally made in March).

These complaints were all filed in 2013, shortly after loans began transferring to OSLA. During this transition phase, it’s possible there was some confusion among borrowers and even customer service representatives with the new system. There have only been 2 complaints in 2015, with one negative review left in February 2015 about incorrect tax information being provided.

Resolving a Dispute With OSLA Servicing

Just because there are a lack of complaints doesn’t mean you haven’t had a hard time communicating with OSLA. Before you can submit a complaint with the Student Aid Ombudsman Group, you must try contacting OSLA first.

Unfortunately, OSLA doesn’t make its contact information public. You must log in to view it. The only information available is a phone number: 866-264-9762, and email ( Customer service hours are between 8AM – 5PM CT.

The address listed on the bottom of the website is as follows:

Oklahoma Student Loan Authority
525 Central Park Drive
Suite 600
Oklahoma City, OK 73105

However, if you can log onto your account, you should double check to make sure there isn’t a different address for specific correspondence.

Our advice is to keep calling and emailing until you receive a helpful response. You may not have any luck on the first or second try. It’s a hassle, but so is having an unresolved student loan issue.

When to Get Help from the Student Aid Ombudsman Group

If you’ve successfully contacted OSLA, but it hasn’t helped you yet (and you’ve spent weeks or months trying to resolve your problem), then you can call in the Student Aid Ombudsman Group. Why do you have to wait? This checklist of steps must be completed before contacting them (it says so right on the page). Use this checklist as a guide to prepare.

After completing the checklist, you should have all the information you need to submit a complaint, which you can quickly do online. Alternatively, you can mail that form to this address:

U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144

You can also call to speak with an Ombudsman at 1-877-557-2575, or fax documents or forms to 202-275-0549.

Please note that you’re free to submit a complaint if you think you’ve taken appropriate action and OSLA isn’t holding up its end of the agreement. Don’t think your complaint is too trivial if it has caused you a lot of stress. Other people may be experiencing the same problem, and the more complaints that are submitted, the more attention it will get.

Make Your Voice Heard

You shouldn’t be getting wronged by student loan servicing companies. While no industry is perfect, student loan servicers are garnering more and more attention as wrongful practices surface. That’s only happening because borrowers are speaking up. You have a right to let your concerns be heard as long as they’re reasonable. If you’ve been struggling to get an issue resolved, let it be known and file a complaint with the Ombudsman so the appropriate action can be taken.


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College Students and Recent Grads, Life Events

Income Share Agreement vs Student Loan for Funding Your Education

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When it comes to funding your education, there is a new alternative to student loans. Enter the Income Share Agreement (known as an ISA).

The ISA is gaining traction now because of the student loan crisis sweeping the nation, but it actually is not a new idea. The idea originates from Milton Friedman in his 1955 essay titled, “The Role of Government in Education.” Friedman argued that education should be funded through an equity investment – not through debt.

What is an ISA?

An Income Share Agreement can be used to fund college as an alternative to student loans. Specifically, an ISA is an agreement between an entity (investor, bank, employer, etc.) and a student wherein the investor gives money to the student to pay for college in exchange for the student promising the investor a percentage of his income, for a set period of time, after graduation.

In order for ISAs to have the mainstream effect that student loans have, there arguably needs to be more regulatory structure in place. Sen. Marco Rubio and Rep. Tom Petri introduced ISA legislation last year. And just last summer, Rep. Todd Young and Rep. Jared Polis introduced additional legislation developed by Gov. Mitch Daniels that would create legal framework for ISAs.

It is yet to be seen what laws will help support using ISAs, but ISAs have been introduced in Washington.

[How to Get Student Loans Out of Default]

How is an ISA different than a Student Loan?

Unlike student loans, the repayment of an ISA would be entirely dependent on the student’s income. Meaning, the repayment would be a set percentage of the student’s income after graduation would not depend on a principal balance or interest (like a traditional student loan).

For example, if you take out a $50,000 student loan with a 5% interest rate, you have to pay that loan amount back, plus interest. With an ISA, there is no loan balance or interest. Instead, you as the student negotiate with the investor who finances your education as to the percentage of income you will give to him and for how long after you graduate.

ISAs are more of a gamble for investors than student loans because the investor is hoping to get more money back (assuming you make a high income after you graduate), but run the risk of not getting the money they invested back in full (if you make a smaller income post graduation).

ISAs are agreements between a private, for-profit entity investor and a student. With a private student loan, you have a similar relationship to a private lender. However, if you take out federal loans, the relationship is very different. With federal loans, there are options for forgiveness, forbearance, etc. An ISA would not have any of these government options.

[19 Options to Refinance your Student Loans]

How to Get an ISA?

There is a push to increase the use of ISAs because of the student loan epidemic right now. ISAs are viewed as a possible alternative to financing education without getting into debt.

While ISAs haven’t taken off rapidly yet, some students are already using ISAs to fund college.

Two companies that currently offer ISAs are Upstart and Pave (here is an interview with Pave CEO about ISAs). As a student, you may be able to enter into an agreement whereby you are given money to fund your education in exchange for promising to pay a percentage of your income to the company after you graduate from college.

To find more companies that offer ISAs, you have to search pretty hard right now. That may change over time as ISAs gain popularity. So far, it is private companies that are offering ISAs (similar to a company that offers to refinance your student loan in that it’s a private company that you are making a contract with).

The specifics as to how you can be approved and qualify for an ISA for a particular company will depend completely on the company’s terms and requirements. As ISAs become a more readily available alternative (and as legislation is passed), the structure through which you can apply and qualify for an ISA may become more standard.

If you are interested in using an ISA as an alternative to funding your education, consider researching various companies that offer ISAs and comparing what you would likely repay with a student loan to what you would promise to pay as a percentage of your income. It will be more difficult to determine what your overall cost will be of an ISA because you can’t predict, for certain, what your income will be after graduation. However, you can consider your projected career path and the average incomes in that field as an estimate.

[How to Set Up Income-Driven Repayment Plans]

ISAs May Still Be Elusive

ISAs are an alternative to student loans that allow the student to borrow money from an entity (investor, bank, employer, etc.), and in return pay a percentage of his income to the entity after graduation for a specific amount of time (the student does not have to repay any principal or interest).

One criticism of ISAs is that it would benefit investors to invest in students attending top universities and those who are likely to be high earners. If that were the case, this would not help the student loan epidemic for the middle class. But for students getting professional degrees, ISAs could be a real solution to their education financing problems.

While there is hope that ISAs will reduce the burden of student loan debt, it is yet to be seen what the true impact will be.

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College Students and Recent Grads, Reviews

Review: SunTrust Custom Choice Loan

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SunTrust offers students a good option to finance their education with its Custom Choice Loan. Interest rates are fairly low, students may apply with a cosigner, and it comes with several repayment options. As a bonus, SunTrust offers graduates a 1% principal balance reduction as long as students graduate with at least a Bachelor’s degree.

Details of SunTrust’s Custom Choice Loan

The minimum amount you can borrow is $1,001 and the maximum amount you can borrow is $65,000. The total amount of Federal and private student loan debt you take out per year can’t exceed $150,000. You can choose a 7- or 10-year repayment term, and a 15-year term is available for borrowers taking out $5,000 or more.

Fixed APRs range from 4.949% to 10.585%, and variable APRs range from 3.789% to 9.153%.

You have four choices of repayment plans:

  • Immediate Payment – There’s no grace period as you begin full payments while in school
  • Interest-only Payment – You pay the interest that accrues on your balance while in school
  • Partial Payment – Available on loans $5,000 or more, you can make payments of $25 per month while in school
  • Full Deferment – You get a grace period of six months when you choose this option, and you’re eligible for deferment as long as you’re enrolled in school part-time at an approved school (this option is the closest to how Federal student loans function)

The interest rate you get approved for is based on your credit history, loan term, amount requested, and other information provided on your application.

A 0.25% interest rate reduction applies if you set your loans to autopay, and SunTrust customers benefit from an additional 0.25% reduction if they pay through their SunTrust bank account.

How Does the Custom Choice Loan Compare to Federal Student Loans?

Before applying for the Custom Choice Loan, you should exhaust all of your federal student loan options first. Make sure your family fills out the FAFSA form to see what you might be eligible for. Federal student loans have lower fixed interest rates, and come with more benefits than private student loans do. These benefits will help in case you hit a rough patch with your money.

For the 2015 – 2016 Academic year, Direct Subsidized and Unsubsidized Loans have a fixed interest rate of 4.29%. That makes the 4.949% fixed APR and 3.789% variable APR of the Custom Choice Loan look good. However, those are the lowest possible APRs available, and if you don’t have excellent credit, you may not be eligible to receive them. Variable rates are also subject to change, which means they can increase over the life of your loan and become more expensive.

SunTrust doesn’t have an origination fee with its loan, but the Direct Subsidized and Unsubsidized Loan has a 1.068% disbursement fee as of the 2015 – 2016 academic year.

SunTrust’s APRs aren’t horrible, though. If you can, apply with a cosigner who has better credit, as you’ll be eligible for lower rates. You want to get as close to Federal interest rates as possible to get the best deal.

[7 Things You Need to Know about Private Student Loans]

Eligibility Requirements

You must be a U.S. citizen or permanent resident to apply. A majority of four-year public or private colleges are eligible – you can check eligibility on the first page of the application.

If your credit history isn’t sufficient enough, you can apply with a cosigner, and there’s a cosigner release option available after 48 consecutive, on-time payments.

You must also be the legal age of majority when completing the application. Applicants residing in Iowa or Wisconsin aren’t eligible for this loan.

[How to Tell if Your Loans are Federal or Private]

Application Process and Documents Needed

You can apply online by yourself or with a cosigner. After your application and credit (a hard credit inquiry is used) are reviewed, you’ll be presented with your loan options. If you choose to move forward with the loan, you’ll be provided with a list of documents you need to upload.

Once you’ve submitted everything, an Approval Disclosure will be sent to you for acceptance. You have 30 days to accept the terms of the loan before they expire.

Upon acceptance, SunTrust will contact your school to request certification of the loan, as you’re only allowed to borrow enough to cover your education expenses. This also ensures you don’t take out more student loan debt than necessary.

Once everything is complete, you (and your cosigner, if you applied with one) have three days to back out of the loan. After that, the loan is finalized, and the funds are sent directly to your school.

Have these documents ready to submit when applying:

  • Proof of income – the student or cosigner must show proof of positive income in the form of a recent W2, paystub, or tax return
  • Photo ID
  • Proof of residency may be required if Photo ID isn’t sufficient

The Fine Print

There are no origination, application, or prepayment fees for this loan. If you’re 10 days past due on a payment, you’ll be charged 5% of the unpaid amount as a late fee.

The minimum loan amount is different in certain states: $5,001 in Alaska, $3,001 in Colorado, $2,501 in New Mexico, $4,901 in Oklahoma, $5,001 in Rhode Island, and $3,601 in South Carolina.

[Student Loan Disbursement 101]

Repayment Assistance Options

American Education Services is the loan servicer for SunTrust. If you experience any difficulty repaying your student loans, you’ll have to contact them for repayment assistance options. You may be able to apply for a deferment, forbearance, or interest-only payment for an extended period of time.

Pros and Cons of the Custom Choice Loan

Pro: If the borrower dies, then the balance of the loan may be forgiven as long as SunTrust is contacted and provided with proof of death. (If the cosigner dies, the student remains responsible for the loan.) Students who become permanently disabled can apply for a loan discharge as well.

Con: The loan isn’t available to those living in Iowa or Wisconsin, and minimum loan amounts differ in six states. Make sure that doesn’t apply to you in case you’re not looking to borrow a large amount.

Pro: The Custom Choice Loan fittingly gives you a few choices when it comes to loan repayment options. Choosing partial payments or interest-only payments can help lessen the amount of interest you’ll pay over the life of your loan, and are easier to manage than going into immediate repayment.

Pro: SunTrust offers a Graduation Reward where 1% of your principal balance will be reduced, provided you graduate with at least a Bachelor’s degree. The principal balance is based off the net total of all disbursements you receive from SunTrust.


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Private Student Loan Alternatives

Not eligible for a loan with SunTrust? There are many other private lenders offering student loans, such as Citizen’s Bank and Sallie Mae.

Citizens Bank: You can borrow up to $90,000 and your combined Federal and private student loan debt can’t exceed $120,000. Fixed APRs range from 6.25% to 10.75%, and variable APRs range from 2.92% to 8.67%. Repayment terms offered are 5, 10, and 15 years.

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Sallie Mae: One of the most well-known private student loan lenders, Sallie Mae has a Smart Option Student loan with fixed APRs ranging from 5.74% to 11.85%, and variable APRs ranging from 2.25% to 9.37%. You can borrow up to the cost of attendance, and this loan comes with a Graduated Repayment option.

sallie mae

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It’s also worth checking with your bank or local credit union for their rates. If you or your cosigner have an existing relationship with a bank, that could help you secure lower rates.

Are you afraid of your credit being negatively affected if you apply with too many lenders? As long as you complete applications within a 30-day window, then the credit bureaus will count all inquiries as one inquiry, ensuring your credit doesn’t take a huge hit. Shopping around for the best deal is worth the effort with student loan debt being such a burden. Lower interest rates will make your loan more affordable.

A Solid Option if You Have to Use a Private Lender

The SunTrust Custom Choice Loan is a solid option for students requiring more financial assistance than what the Federal government can provide. SunTrust customers benefit more with the 0.50% interest rate deduction, and no one can complain about receiving a 1% principal reduction on their loans upon graduating.


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College Students and Recent Grads, Pay Down My Debt, Reviews

Review: Nelnet, Inc. Student Loan Servicer

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According to Chairman Mike Dunlap, Nelnet’s overall mission is to “make educational dreams possible.” It’s headquartered in Lincoln, Nebraska, and more than five million borrowers have their student loans (federal and private) serviced by Nelnet.

Unfortunately, as a federal student loan borrower, you don’t get to choose the company that services your loans. While the U.S. Department of Education remains the owner of your loans, you’re assigned to one of ten federal student loan servicers when your loans are disbursed. Nelnet is one of those ten.

If your student loans are serviced through Nelnet and you’d like to get a better idea of what to expect in terms of customer service, information and services available through the website, and how to dispute an issue with Nelnet, read on.

Overview of Nelnet

Nelnet’s website is fairly easy to navigate, and all the important information is provided on the front page in a grid pattern. Pages worth a visit include:

  • Lower your payment with a new repayment plan: A large amount of federal student loan borrowers aren’t aware that they can apply for a different repayment plan and lower their minimum student loan payment. If you’re experiencing financial difficulty, you should check to see what options are available to you. Nelnet provides a chart that compares all the repayment options, and it also gives you instructions on how to change your plan.
  • Postpone your payments with deferment or forbearance: Similar to the page above, it’s useful to know when you’re eligible to hit “pause” on your student loan payments. Forbearance and deferment are temporary fixes, whereas repayment plans tend to be more permanent. Either one will help in the event you hit a rough spot with your finances. Nelnet breaks down the different types of deferment borrowers may be eligible for, and explains how you can apply.
  • Get financially fit: This is Nelnet’s library of financial knowledge that any recent graduate can benefit from. There are worksheets for budgets, tips on how to use credit responsibly, how to safeguard yourself from identity theft, a worksheet for your financial goals, and more.
  • FAQ: Every loan servicer has one, but it’s worth reviewing the popular questions so you know what to expect. For example, Nelnet covers making payments, how to opt-in to automatic debits, how payments are applied, payoff and tax information, and what happens when your loans become delinquent.

Many loan servicers offer knowledge centers that borrowers aren’t aware of. It pays to familiarize yourself with the site as you’ll likely be spending a lot of time there throughout your student loan payoff journey.

What Borrowers Are Saying

Nelnet has had 343 complaints closed with the Better Business Bureau in the last three years at the time of writing. The most common problem cited involves the product and service offered, as well as billing and collection services.

Some complaints are in reference to Nelnet reporting loans incorrectly to the credit bureaus, with loans showing as delinquent or default when they were paid. Other complaints are about the lack of customer service – borrowers have attempted to contact Nelnet several times, or have tried to submit paperwork, and Nelnet insists it hasn’t received anything from the borrower.

In a post on The College Investor about Nelnet, many people have commented that they’ve experienced difficulty in getting their loans paid down properly. Among their complaint were that Nelnet fails to acknowledge payments at times, doesn’t communicate clearly with borrowers when their loan is transferred, and sometimes drops the ball when borrowers apply for forgiveness, discharge, or forbearance.

This is not acceptable behavior from a student loan servicer. You shouldn’t have to jump through hoops to get a servicer to acknowledge that you’ve made a payment or a special request, and it shouldn’t be reporting false information to the credit bureaus (though that happens more often than you think – make sure you make a habit out of checking your credit report!).

First Steps to Take to Resolve Disputes With Nelnet

If you’ve been trying to contact Nelnet to no avail, you should be keeping a paper trail or detailed notes documenting each attempt.

If you haven’t tried contacting Nelnet yet, then you should. Despite some people having communication issues, it’s your job to alert Nelnet to the problem you’ve been experiencing. Have you been emailing Nelnet or submitting a secure form online? Then try calling instead. Different methods of communication may yield different results.

It can be a pain to go through this, but if your issue is severe (such as having false information on your credit report), you need to take every action possible to get Nelnet to fix it.

There are several ways to contact Nelnet:

You can email a representative by filling out a form.

You can call them 24/7 at 1-888-486-4722. The fax number is 877-402-5816.

Its general correspondence address is:

P.O. Box 82561
Lincoln, NE 68501-2561

Note that there are different mailing addresses for documents related to deferment, forbearance, repayment plans, and enrollment status changes, as well as loan discharge and forgiveness claims, and bankruptcy claims. Those can be found on the “Contact Us” page.

Nelnet also claims it answers any questions asked via Twitter or Facebook within 24 hours. It’s worth a try, especially as social media is much more public. Others might be experiencing the same troubles as you, too.

When All Options Are Exhausted, Get the Student Aid Ombudsman Involved explicitly states that you must make an attempt to contact Nelnet before turning to the Student Aid Ombudsman Group. Do everything in your power to resolve the situation yourself, which will prepare you to get on the phone with the Ombudsman when the time comes.

You can also prepare by using this list provided by the Ombudsman Group to gather the necessary information for review. When you’re ready, you can call 1-877-557-2575, fax 202-275-0549, fill out the online dispute form, or write to them at the following address:

U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144

If you choose any of the alternatives to filling out the form online, be sure to include all the information on that form in your correspondence. It will cut down on the back and forth while communicating with the Ombudsman Group.

Submitting a Complaint With the CFPB When You Have Private Loans

The Student Aid Ombudsman serves borrowers with federal loans, and the Consumer Financial Protection Bureau serves those with private student loans. Nelnet services both types of loans, so if you have private loans, you’ll want to file a complaint with the CFPB instead.

The CFPB has been getting very strict with private lenders on the matter of abuse. If you think you’ve been wronged by Nelnet, then it’s worth making the CFPB aware of it. All you need to do is go here and fill out the short student loan complaint form.

After you’ve submitted it, Nelnet will have 15 days to respond to your complaint, and the CFPB will help you and Nelnet reach a resolution. Most cases are resolved within 60 days.

Don’t Give Up

Resolving a dispute with a lender or loan servicer can be tiring, but it’s important not to give up. You have certain rights as a consumer, and loan servicers shouldn’t be trying to take advantage of you. Do what you can to get a Nelnet representative on the phone, and remember to write down names, dates, and what was discussed in the conversation in the event the representative doesn’t log it. This will help you if you need to escalate your efforts by bringing the issue to the attention of the Ombudsman Group or the CFPB.


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College Students and Recent Grads, Pay Down My Debt, Reviews

CommonBond Grad Student Loan Refinance Loan Review

CommonBond Grad Student Loan Refinance Loan Review

Updated January 8, 2016

CommonBond was founded by three Wharton MBAs who felt the sting of student loans after they graduated. The founders decided to provide a better solution for graduates, as they thought the student loan system was broken and in need of reform. As a result, they strive to make the refinance (and borrowing) process as simple and straightforward for graduates as possible.

CommonBond* began by servicing students from just one school, and has rapidly expanded. Today, CommonBond loans are available to graduates of over 2,000 schools nationwide. Although the business started servicing only students with graduate degrees, today CommonBond is also available to refinance undergraduate degrees as well.

As you might be able to tell by the name, CommonBond thinks of its community as family. There is a network of alumni and professionals within the community that want to help borrowers. This alone sets it apart from other lenders, as members often meet for events.

While these are all great things, we know you’re more interested in how CommonBond might be able to help you make your student loans more affordable. Let’s take a look at what terms and rates they offer, eligibility requirements, and how they compare against other lenders.

Refinance Terms Offered

CommonBond offers low variable and fixed rate loans. Variable rates range from 2.13% – 5.68% APR, and fixed rates range from 3.25% – 7.49% APR.

Note that these rates take a 0.25% auto pay discount into consideration.

There is no maximum loan amount. CommonBond will lend what you can afford to repay. CommonBond offers fixed and variable rates with terms of 5, 10, 15, and 20 years.

The hybrid loan is only offered on a 10 year term – the first 5 years will have a fixed rate, and the 5 years after that will have a variable rate.

CommonBond has a great chart listing repayment examples based off of borrowing $10,000, which can be found on its rates and terms page.

To pull an example from that, if you borrow $10,000 at a fixed 4.74% APR on a 10 year term, your monthly payment will be $104.80. The total amount you will pay over the 10 year period will be $12,575.90.

The Pros and Cons

CommonBond is available to graduates of 2,000 universities. While that is a very long list, not all colleges and universities are included.

One pro to consider is the hybrid loan option available. It might seem a little confusing at first – why would someone want a variable rate down the road?

If you’re confident you’ll be able to make extra payments on your loan and pay it off before the 5 years are up, you might be better off going with the hybrid option (if you can get a better interest rate on it).

This is because you’ll end up paying less over the life of the loan with a lower interest rate. If you were offered a 10 year loan with a fixed rate of 6.49% APR, and a hybrid loan with a beginning rate of 5.64%, the hybrid option would be the better deal if you’re intent on paying it off quickly.

What You Need to Qualify

CommonBond doesn’t list many eligibility requirements on its website, aside from the following:

  • You must be a U.S. citizen or permanent resident
  • You must have graduated

CommonBond doesn’t specify a minimum credit score needed, but based on the requirements of other lenders, we recommend having a score of 660+, though you should be aiming for 700+. The good news is CommonBond lets you apply with a cosigner in case your credit isn’t good enough.

Documents and Information Needed to Apply

CommonBond’s application process is very simple – it says it takes as little as 2 minutes to complete. Initially, you’ll be asked for basic information such as your name, address, and school.

Once you complete this part, CommonBond will perform a soft credit pull to estimate your rates and terms.

If you want to move forward with the rates and terms offered, you’ll be required to submit documentation and a hard credit inquiry will be conducted. CommonBond lists the following as required:

  • Pay stubs or tax returns (proof of employment)
  • Diploma or transcript (proof of graduation)
  • Student loan bank statement
  • ID, utility bills, lease agreement (proof of residency)

CommonBond also notes it can take up to 5 business days to verify documents submitted, so the loan doesn’t happen instantaneously.

Once your documents are approved, you electronically sign for the loan, and CommonBond will begin the process of paying off your previous lenders. It notes this can take up to two weeks from the time the loan is accepted.

Who Benefits the Most from Refinancing Student Loans with CommonBond?

Borrowers who are looking to refinance a large amount of student loan debt will benefit the most from refinancing with them.

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*referral link

Keeping an Eye on the Fine Print

CommonBond does not have a prepayment penalty, and there are no origination fees nor application fees associated with refinancing.

As with other lenders, there is a late payment fee. This is 5% of the unpaid amount of the payment due, or $10, whichever is less.

If a payment fails to go through, you’ll be charged a $15 fee.

It’s also noted that failure to make payments may result in the loss of the 0.25% interest rate deduction from auto pay.

Transparency Score

Getting in touch with a representative is simple and there is a chat and call option right on the homepage. Some lenders have this hidden at the bottom, or they don’t offer a chat option at all.

CommonBond also lets borrowers know they can shop around within a 30 day period to lessen the impact on their credit.

It does not list its late fees on its website, unlike other lenders. However, after making a chat inquiry, the question was answered promptly.

CommonBond does offer a cosigner release and is ranked with a A+ transparency score.

Alternative Student Loan Refinancing Lenders

The student loan refinancing market continues to get more competitive, and it makes sense to shop around for the best deal.

One of the market leaders is SoFi. It’s always worth taking a look to see if SoFi* offers a better interest rate.

The two lenders are very similar – CommonBond offers “CommonBridge,” a service that helps you find a new job in the event you lose yours. SoFi offers a similar service called Unemployment Protection.

SoFi’s variable rates are currently 1.90% – 5.18% APR, and its fixed rates are currently 3.50% – 7.24% APR, which is in line with what CommonBond is offering.

SoFi also doesn’t have a limit on how much you can refinance with them.

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 *referral link

Another lender to consider is Earnest. There is no maximum loan amount, and Earnest has a very slick application process.

Its variable rates are currently 1.90% – 5.75% APR, and its fixed rates are currently 3.50% – 7.25%.


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*referral link

Lastly, you could check out LendKey. It offers student loan refinancing through credit unions and community banks, but only offers variable rates in most states and fixed rates in a select few. The maximum amount to refinance with an undergraduate degree is $125,000, and the maximum amount to refinance with a graduate degree is $175,000.

All three of these options provide forbearance in case of economic hardship and offer similar loan options (5, 10, 15 year terms).


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*referral link

Don’t Forget to Shop Around

As CommonBond initially conducts a soft pull on your credit, you’re free to continue to shop around for the best rates if you’re not happy with the rates it can provide. As the lender states on its website, if you apply for loans within a 30 day period, your credit won’t be affected as much.

Since CommonBond does have strict underwriting criteria, you should continue to shop around and don’t be discouraged if you are not approved. The market continues to get more competitive, and a number of good options are out there.

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*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.


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REPAYE Student Loan Repayment: Is it Better and How to Qualify

REPAYE Student Loan Repayment

As of December 17, 2015, student loan borrowers apply for REPAYE consideration here. Learn more about the program and how you can become eligible below. 

The federal government just made student loan debt repayment easier for millions of Americans. The Revised Pay As You Earn (REPAYE) plan lets any federal student loan borrower with a Direct Loan cap monthly loan payments at 10% of discretionary incomes. You are no longer limited by when you took out loans or your debt-to-income ratios.

Who is Eligible 

You are able to enroll if you have any Direct Loan. If you have non-Direct Loans such as a Stafford Loan or Perkins Loan, then you could consolidate the loans using the Federal Direct Consolidation Loan in order to make them eligible.

Parents who borrowed with a federal Parent PLUS loan are still not eligible.

You can compare your options between REPAYE and other income-driven repayment plans at, or contact your servicer.

When Loans are Forgiven

Undergraduate borrowers

If you’re repaying undergraduate student loans, then you will have the remainder of your loans forgiven after 20 years of payments.

Graduate school borrowers

If you’re seeking to forgiven graduate school loans, then you will be on a slightly extended repayment program. Those loans will be forgiven after 25 years of qualifying payments instead of 20. 

How it Differs from PAYE

Like REPAYE, the existing PAYE program also allows for a monthly payment of no more than 10% of discretionary income and the difference is forgiven after 20 years. But there are some key differences:

REPAYE is available to borrowers of all years

That’s a big expansion beyond the existing Pay As You Earn (PAYE) plan. That’s only available to a borrower who is new as of Oct. 1, 2007, and received a disbursement of a Direct Loan on or after Oct. 1, 2011. The PAYE plan also requires you to declare financial hardship as a reason for payments need to be lowered.

The new REPAYE plan offers the same payment level (10% of discretionary income) as PAYE, but makes many more borrowers eligible.

For married borrowers both incomes will be counted

Even if you file taxes separately, the government will add up both of your incomes to determine your monthly payment under REPAYE. Previously, under PAYE, if a borrower filed separately only one income would be used to calculate the payment, which let some borrowers enjoy a much lower payment than if they filed taxes jointly.

How to Sign Up

You can call your loan servicer for details. If you have no questions, you can proceed to, log in and fill out the application for an Income-Driven Repayment Plan.

[Not sure which loan servicer you have? You can check in the National Student Loan Data System.]

The application is called the Income-Driven Repayment Plan Request, which can be done all online via or in paper form via your servicer.

Before getting started, be sure to collect the following information:

  • The income-driven repayment plan in which you want to be enrolled
  • Your income information, specifically your adjusted gross income (AGI). You can get your AGI off your most recent federal income tax return if it is not significantly different from your current income.
  • You could also use the IRS Data Retrieval Tool in the application to transfer income information from your federal income tax return.
  • You can find the paper copy of the application here.

While the application doesn’t take too long, it can be a few weeks before the repayment plan kicks in. Don’t forgo making payments on your plans before you’ve received confirmation that your REPAYE plan is up and running.

Learn more about setting up income-driven repayment plans here.

It Isn’t One Application and Done

Unfortunately, you can’t just apply once and just make payments until your debt is forgiven in 20 years (or 25 years for graduate students). You’ll be required to submit your proof of income on an annual basis, because as your income changes, so does your payment.

Public Service Loan Forgiveness Eligibility & Lump-Sum Payments

Borrowers enrolled in REPAYE and working for the government or a non-profit job for ten years and make 120 on-time payments can have their debts forgiven in 10 years under the Public Service Loan Forgiveness (PSLF) Program.

All income-driven repayment plans will now allow lump-sum payments made on behalf of borrowers through student loan repayment programs administered by the Department of Defense to count toward Public Service Loan Forgiveness. This is similar to lump-sum payments made for Peace Corps and AmeriCorps volunteers.