Stafford Student Loan News

I recently conduced a survey to find out if students knew they could choose their own lender for their Stafford loan when attending a FFELP school.  The results I got back were quite alarming.  Only 34% of students got the answer correct and I even provided a helpful link which makes me wonder if that number may have been even lower otherwise.

I guess my earlier lesson bears repeating.  You may select the lender of YOUR CHOICE when it comes to Federal loans at FFELP schools (provided your lender disburses federal loans of course).  The school will be held liable and subject to fines and other sanctions if they  block you or do not certify your loan.

Flex some muscle.  Don’t let the FAO tell you otherwise.

If your school participates in the Federal Family Education Loan Program (FFELP) they are not permitted to refuse to certify a loan because of the lender the borrower has selected.

The law and regulations clearly prohibit institutions from refusing to certify a loan based on the borrowers choice of lender. Section 432(m)(1)(B)(ii) of the Higher Education Act of 1965, as amended (HEA). The Department’s regulations at 34 CFR 682.603(e) further provide that the limited authority under which a financial aid administrator may refuse to certify a Stafford or PLUS loan does not include the borrower’s selection of a particular lender or guaranty agency.

Furthermore, a school’s failure to comply with these requirements may result in the Department of Education imposing a fine or taking other administrative actions.

So if your FAO refuses to certify your loan based on the lender just quote the Higher Education Act of 1965. That will send chills down their quivering spine!

I have a question for you. Have you ever stopped to consider what fees are associated with your Stafford loan undergraduate application? If you have than you are in the minority. Most students generally have trouble just navigating the student loan process on the whole; fee’s become an afterthought.

The simple fact is many lenders charge fees ranging from 1-2%. Fee’s are about the only thing these days which delineate one lender from another. The interest rates are fixed and can not be negotiated, but fee’s can fluctuate.

Here at staffordloan.com we work with Discover Student Loans on undergraduate Stafford loans and are happy to inform you that we waive the fees for you! There are zero fees! The application process is quick and easy. Just make sure to complete your FAFSA first!

To apply now (click here).