Should You Prefer Your Preferred Lender List?
Get the lowdown on preferred lender lists.
By Sandra Guy
May 16, 2016
Students whose financial aid packages include loans will receive a preferred lending list with their financial aid package.
Most college financial aid office have one.
What is a preferred lender list? And can you trust the list?
A preferred lender list is college’s list of lenders that meet certain criteria which they believe will help students. Lists typically include between four and 10 preferred lenders. The criteria include the terms that lenders offer, such as competitive interest rates, reputable online and customer services, and offers to help students by, for example, paying a student’s loan-origination fees.
Preferred lender lists got started to help students and their families weed through the hundreds of lenders that offer student assistance. Before they consider the list, students and their families should ensure that they really need the loans, experts say.
“Students and their families should first make sure they are getting as much free, need-based grant aid as possible,” said Justin Draeger, President for the Washington, D.C.-based National Association of Student Financial Aid Administrators (NASFAA).
The preferred lender list isn’t “one size fits all,” Draeger said. “Students and parents should feel free to ask questions such as, ‘What criteria do you use to compile your list?’ and ‘Are there any arrangements between the school and the lender?’” he said.
Students who prefer to research lenders on their own can scour each lender’s Web site to review the lenders’ product offerings or find sites that compare certain lender’s offers. Numerous other Web sites provide detailed information about financial aid and ways to pay for college, including Fastweb.com and FinAid.org, or by typing key words such as “lender comparison” into search engines.
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