Criteria for Bates Stafford & PLUS Suggested Lenders

In selecting Federal Family Education Loan Program (FFELP) lenders to suggest to students (Federal Stafford Loan Program) and parents (Federal PLUS Loan Program) seeking federal loans to help pay the costs of a Bates education, we considered factors including assurance that lenders would lend to Bates students; that they expect to remain in the student lending market for the foreseeable future; timely processing and disbursement; and high quality service. 

Once we have established that a lender will lend to students enrolled at Bates and that the lender can reasonably be expected to continue to offer FFELP loan products going forward, emphasis is placed on quality service defined by efficient application processing and good communication with borrowers. We have chosen lenders we believe will be able to work capably and cooperatively with the College on behalf of student and parent borrowers.

Consideration is given to borrower benefits within the student loan marketplace.  However, most incentives such as waiving of origination and default fees by lenders on behalf of borrowers have largely disappeared as lenders have sought to reduce their costs in response to reduction in federal subsidies and tightening credit markets.  Many “back-end” benefits such as interest rate reductions in repayment were utilized by only a small percentage of borrowers since the conditions for receipt of such benefits were quite rigid or would be forfeited if a borrower consolidated loans in repayment.  Hence, Bates has always placed a higher consideration on attentive service and quality communication with borrowers in suggesting FFELP lenders.  We believe these qualities help borrowers understand their rights and responsibilities with respect to education loans thereby facilitating smooth repayment and reduced delinquencies and default.  Of the three lenders suggested for 2009-2010, Nelnet and Citizens Bank offer a 0.25% interest rate reduction in repayment when a borrower elects to pay through auto-debit payments.  Otherwise the repayment interest rate in repayment for Bates suggested lenders conforms with FFELP mandated maximums for subsidized Stafford (5.6%) unsubsidized Stafford (6.8%) and PLUS (8.5%) Loans.

Students and parents at Bates are under no obligation to borrow from one of the lenders suggested by the College and we do not assign lenders.  Bates will certify loans with any lender offering loans to students/parents of students attending the College.