Many students who borrow to pay for college wade into the real world despairing of ever being able to pay off their loans. One of the key ways students and parents can minimize their loan obligations is to shop around for the best providers before they borrow. Although there is no definitive list of best loan providers, this article shows you some that have received accolades from consumers and financial-aid websites.

The Federal Government

Any list of top student loan providers has to begin with Uncle Sam. Federally subsidized student loans are often the cheapest – and in many cases, the only – alternative for lower or middle-income students and families who need to pay for college. Pell grants and subsidized loans offer rates and repayment terms that are typically far superior to anything found in the private sector, including deferment, forbearance and loan forgiveness programs. For more information on federal student loans, visit www.studentloans.gov. The site is loaded with information and resources.

Sallie Mae

Although it is a separate agency from the federal government, Sallie Mae offers student loans for undergrads, graduates and parents. Moneysavingspro.com has rated the agency highly because of its competent customer-service department, ability to provide both federal and direct loans, and flexible repayment programs. Its website offers secure encryption protection as well as a loan calculator that allows borrowers to project their repayment programs. Sallie Mae, however, has not been accredited by the Better Business Bureau, and it is not possible to reach its customer-service department via email, just by phone.

Nelnet

This provider is geared toward private loans. Nelnet offers a website loaded with tools and resources that help borrowers determine where they are financially and provides all of the necessary information that they need to choose the best loan. Some of the tools include budget sheets, guidance on how to prevent identity theft and education on general money management. It also provides answers to a comprehensive list of FAQs and offer both email and telephone customer service support. Nelnet’s current loan rates are in the 6% range, although its variable rates may be higher.

StudentLoan.com

The StudentLoan.com website differs from Sallie Mae in that it is owned and operated by Discover Bank; until 2010 it was owned by Citibank. This can be viewed as a possible disadvantage in some ways, as student loans are just one of the many products and services that are offered by this conglomerate. For a site that is sponsored by a single institution, however, this portal is easily one of the best. It offers comprehensive educational tools, articles and calculators for students and parents, and it provides a variety of payment options both online and via telephone. About the only major service that it does not offer is loan consolidation.

Citizens Bank

Although it does not have a separate site devoted to student loans like Discover Bank, Citizens Bank’s student loan webpage is very user-friendly and easy to understand. This bank offers both private and federal loans for students and parents at both the undergraduate and graduate levels. Citizens offers a variety of payment options, but does not provide loan consolidation.

Social Finance

This unique company provides younger borrowers who lack the financial credentials typically required by banks and other traditional lenders with a viable alternative for their student loans. SoFi was the first to refinance both federal and private loans, and its underwriters consider such nonstandard factors as professional merit and work history in addition to the borrower’s credit profile. Fixed and variable rate notes are available in multiple terms with no origination fees plus additional benefits for unemployment. The company itself also recently made CNBC’s Disruptor 50 List and is now a member of the Wall Street Journal’s Billion Dollar Startup Club. Its website also offers several educational tools and its average borrower has saved around $14,000.

CU Student Loans

This consolidation provider was created when more than 140 nonprofit credit unions united to establish this group website. It provides loans for undergrads and consolidations for college graduates. Borrowers need to be members of a credit union in order to be eligible for services, which offer low rates and fees.

Wells Fargo

This is one of the few banks that provide consolidation services for private student loans. Wells Fargo offers both fixed- and variable-rate loans, and may award discounts for various incentives, such as graduation or opening another account with the bank.

SimpleTuition

This site offers access to a pool of consolidation lenders. Borrowers can log on and compare prospective rates among lenders without having each of them pull their credit information. The rates are merely estimates, however, based upon an assumed credit score, and borrowers will have to submit to a credit check in order to be approved. Applications can take up to two months for approval, so borrowers should take care to apply to all of the lenders that may suit them at the same time in order to minimize the impact on their credit scores.

Cedar Education Lending

Although Cedar Education Lending offers student loans and consolidation loans, borrowers with very high loan balances or loans that charge high rates of interest may find a better alternative on this site. This site also offers an interest-only loan with a term of 4 years for borrowers whose earnings will be low when they get out of school.

Sun Trust

This bank charges no origination fees and borrowers can apply for and compare fixed and variable rate loans online. Borrowers have to qualify by being enrolled at least half time at an approved school, be a U.S. citizen or permanent resident, and be at least 17 years old. It has suspended its loan-consolidation program.

Student Loan Network

This group allows borrowers to compare lenders and also consolidate loans on its website. Borrowers can consolidate both private and governmental loans here, and this site provides comprehensive educational materials about student loans and information on how borrowers can avoid defaulting on them. It also posts discussion forums that users can troll for answers to questions and further information.

The Bottom Line

Students and parents who need financial assistance now have more options than ever before. Banks, credit unions and other lenders offer a vast array of loans and scholarships that can help to finance education costs in an affordable manner. For more information on student loans, contact your financial aid officer or financial advisor.

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