Houghton College Preferred Lender Information

Houghton College’s preferred lender list was established using the following criteria (in order of importance):

1)     Customer service – including hours of operation and ease of access for the student

2)     Longevity of the lending institution

3)     Holding the note through the life of the loan (as opposed to selling to another lender)

4)     Number of days of grace for monthly payments

5)     Interest rates (for alternative loans)

6)     Not selling student’s information to third parties

7)     Borrower benefits – this did not hold as much weight due to the volatility in the lending market

We solicited a Request for Information (RFI) from 16 different lending institutions.  We then evaluated all of their responses against the above listed criteria.  From that we developed our preferred lender lists for federal and private loans.

Students and parents are not limited or obligated to borrow from a preferred lender.  There will be no penalty for choosing a lender not included on the preferred lender list.

We have chosen to put our list in random order.  We feel that each family needs to evaluate each lender and select the best lender for their situation.  Please read carefully and choose for yourself.

The benefits listed for each lender will continue if the loan is sold to another lender. 

Definition of Terms:

Consolidation: Combining multiple education loans into one new loan with a new repayment term and interest rate.

Co-signer: A signer of a promissory note who is equally liable for the loan application.

Creditworthy: An individual with no negative credit history per the criteria established by the lender.

Deferment: A period of time during repayment in which the borrower, upon meeting certain conditions, is not required to make payments of loan principal

Forbearance: A period of time during which the borrower is permitted to temporarily cease making payments or reduce the amount of the payments.  The borrower is liable for the interest that accrues on the loan during the forbearance period.  Some forbearances are entitlements for eligible borrowers; others are granted at the discretion of the lender.

Grace Period: The amount of time allowed before principal repayment of loan must begin after the student graduates, leaves school or drops below half-time status.

LIBOR: Libor stands for the London Interbank Offered Rate and is the rate of interest at which banks borrow funds from each other, in marketable size, in the London interbank market.

Origination Fee: The fee charged by the government to offset the cost of processing the loan.  The amount of the fee is deducted from the dollar amount of the loan.

Prime: The prime rate is the short-term interest rate that banks charge their best, or prime, customers. 

If you are interested in finding out more about loan consolidation, please contact your lender directly for detailed information.  You are welcome to use any lender you would like if you choose to consolidate your loans.  You are not limited to the lender through which you borrowed your loans, or one of the lenders on the preferred lender list.

Please note that the Stafford loan origination and default fees will vary by lender, up to three percent.  The origination fee for a PLUS loan is three percent, regardless of the lender you choose.  These fees are taken out prior to loan disbursement.



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