Recommended Lenders-Federal Stafford and Grad PLUS Loans

Effective Date of Change:  6/6/2008

Please be advised that recent legislation passed by Congress in early May caused several federal student loan lenders to recently modify their borrower benefit policies after the 2008-09 Student Loan Handbook went to print.  Tufts University was notified that the benefits provided by both Chase Health, Wells Fargo and Salliemae Dental Loan Programs (as described in Part Three of the Student Loan Handbook) have changed.  All three lenders reduced their borrower benefits with Wells Fargo offering no borrower benefits.  Chase and Salliemae now only provide an interest rate reduction of .25% should the borrower opt for ACH when the loan enters repayment.  In addition, Salliemae/USA Funds will no longer pay the 1% default prevention fee on the Stafford and Grad PLUS loans.  As a result of the change in borrower benefits offered, Tufts University has removed Chase and Wells Fargo as recommended lenders and added Citibank and Bank of America.  Since many dental students previously borrowed student loans currently being serviced by Salliemae, Salliemae Dental Loans continues to be included as a recommended lender to provide a Salliemae-serviced lending option for borrowers.  Please note, however, that part of the new legislation allows for lenders to sell their loans to the US Dept. of Education who has yet to determine where purchased loans will be serviced.  Should the student wish to use Salliemae Dental Loans, there is no guarantee that these loans will be serviced by Salliemae.  This could be true for all lenders regardless of their current intention to retain ownership or servicing of their loan portfolios. 

Other Stafford and Grad PLUS lenders may modify their borrower benefit programs in the very near future because of these legislative changes.  It is expected that lenders will provide no more than a .25% ACH interest rate reduction option when the loan enters repayment.  The 1% default prevention fee, however, may still be paid by the guarantor and borrowers are advised to consider this when selecting a lender.  We understand that ASA will still be paying the 1% default prevention fee on Chase Health Stafford and Grad PLUS loans.

Unfortunately, these fluctuations in the student loan industry coincide with the release of our award packets where the information included in this addendum is subject to change even further without notice.  The current state of affairs makes it very difficult for the university to recommend Stafford and Grad PLUS lenders to borrowers.  We are hesitant to make such recommendations but realize that some students may need guidance in this area.  Borrowers are reminded that they are not required to use a recommended lender and are encouraged to explore their options. Regardless of your choice in lenders, the Financial Aid Office recommends that you confirm a lender’s borrower benefits, payment of the default prevention fee, interest capitalization policy and loan servicer directly with the lender prior to completing the MPN/application process recognizing that these terms will be subject to change in accordance with the lender’s policy.

The Financial Aid Office’s website has been updated to reflect changes to our recommended lender lists.  We have also attached a printed copy of the Stafford and Grad PLUS recommended lender lists.  Future changes to the list will be posted on the Financial Aid Office’s website to the best of our knowledge and ability. 

• Recommended Federal Stafford Loan Lenders
• Recommended Grad PLUS Loan Lenders