Bank of America Student Loans: What Happened and Alternatives
Bank of America no longer offers student loans. Here's what that means for current borrowers and where new borrowers can turn for alternatives.
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At one point, Bank of America was one of the nation’s largest issuers of student loans. It offered private loans and even issued federal loans.
In 2008, the company stopped offering private student loans altogether, and between 2014 and 2017, the company sold off its entire $3.9 billion student loan portfolio.
Bank of America still has resources to learn about student loans, but they are no longer issuing new student loans to borrowers. As a result, many people are looking for alternative lenders—and the options below are a good place to start your search.
In this guide:
- What happened to Bank of America student loans?
- What if I already have a Bank of America student loan?
- Alternatives to Bank of America Student loans
What happened to Bank of America student loans?
In 2008, Bank of America announced it would stop offering private student loans. The company began selling off its private loan portfolio and focusing on student loans backed by the federal government.
Like many lenders, Bank of America switched after deciding the student loan market was unprofitable due to the 2008 financial crisis. After leaving the private student loan business, Bank of America transitioned into offering federal loans in partnership with the U.S. Department of Education.
These loans included Stafford Loans, Parent PLUS Loans, and other loans offered under the Federal Family Education Loan Program (FFELP). This was a safer move for banks during a period of financial instability.
Then in early 2015, Bank of America announced it was selling its $2.7 billion federally-backed student loan portfolio. Since Bank of America once offered both federal and private student loans, many borrowers are still repaying loans they took from Bank of America.
What if I already have a Bank of America student loan?
If you have a Bank of America student loan, it might have been sold off to a new provider. You can find out who that is by checking your credit report at www.annualcreditreport.com. If you had an FFEL loan with Bank of America, you can find your new servicer through the National Student Loan Data System.
If you want to change providers, you can refinance your Bank of America student loan with a new lender. Refinancing can save you money if you find a lower interest rate with a different company. Just know that you can only refinance with a private lender, so federal student loans that are refinanced will lose their federal benefits.
Alternatives to Bank of America student loans
If you qualify for federal student loans, that should be the first place to start. Federal loans come with income-driven repayment plans, loan forgiveness options, and longer forbearance programs than private loans.
However, you can take out a private loan if you don’t qualify for federal loans or if you max out the amount available to you in federal loans. Because Bank of America no longer offers student loans, you’ll have to apply with another lender. The companies listed below are popular alternatives worth considering.
College Ave
Editorial Selection: Best Overall
- You choose your repayment terms
- Cover up to 100% of your cost of attendance
- Get a decision in just 3 minutes
College Ave is our top-rated partner and offers student loans to undergraduates, graduates, and parents. You can choose the loan term that best fits your repayment needs if approved.
- Fixed rates (APR): Between 3.24% and 13.95% APR
- Variable rates (APR): Between 0.94% and 12.99% APR
- Loan amounts: $1,000 to 100% of the cost of attendance
- Repayment Terms: 5, 8, 10, or 15 years
- In-school repayment options: Deferred payments, $25 monthly payments, interest-only payments, and full principal and interest payments
- Grace Period: 6 months
- Cosigner Release: Yes; after making more than half of the scheduled payments and meeting other criteria
- Unique benefits: You can apply and receive a credit decision within 3 minutes
What makes College Ave a good alternative
Borrowers who frequently shop online may benefit from applying for a student loan with College Ave. The lender has an agreement with Payce Rewards, which provides cash back that you can use for anything, including your student loans.
If you add a cosigner to the loan, you can remove them when you’re halfway through the repayment term and after you’ve made 24 consecutive on-time payments. Many lenders do not offer cosigner release.
Earnest
Editorial Selection: Best for No Fees
- No origination, late payment, or prepayment fees
- Ability to skip one payment per year
- Check your rate without impacting your credit
Earnest offers student loans to undergraduates and graduates with several different repayment terms and in-school payment options. You can find out if you’re eligible for an Earnest student loan in two minutes without affecting your credit.
- Fixed rates (APR): Between 3.24% and 12.78% APR
- Variable rates (APR): Between 1.34% and 11.44% APR
- Loan amounts: $1,000 and 100% of the cost of attendance
- Repayment Terms: 5, 7, 10, 12, or 15 years
- In-school repayment options: $25 monthly payments, interest-only payments, deferred payments, and full principal and interest payments
- Grace Period: 9 months
- Cosigner Release: Not available
- Unique benefits: Can set up biweekly payments
What makes Earnest a good alternative
Earnest lets borrowers set up biweekly payments, which may be easier to line up with their paychecks. Also, borrowers have nine months after leaving school to start making payments. Borrowers can skip one payment each year, which may come in handy if you lose your job or have an emergency.
Sallie Mae
Editorial Selection: Best for No Cosigners
- 4 free months of Chegg®
- Shortest cosigner release period available
- Loans for undergraduates, graduates, and career training
Sallie Mae is one of the largest private student loan companies around. They offer undergraduate, graduate, and non-degree seeking loans. You can apply for a loan with Sallie Mae and hear back within 10 minutes.
Sallie Mae’s Multi-Year Advantage means 90% of students will qualify for subsequent funding when they apply again with Sallie Mae.
- Fixed rates (APR): Between 3.75% and 13.72% APR
- Variable rates (APR): Between 2.00% and 12.35% APR
- Loan amounts: $1,000 to up to 100% of school-certified costs
- Repayment Terms: 5 – 15 years
- In-school repayment options: Interest-only payments, $25 payments, and deferred payments
- Grace Period: 6 months
- Cosigner Release: After 12 on-time payments and if you meet credit requirements
- Unique benefits: Users get 4 months of online tutoring service Chegg for free
What makes Sallie Mae a good alternative
Sallie Mae has one of the easiest cosigner release programs, and borrowers only have to make 12 on-time payments before having the cosigner removed from the loan. Also, borrowers have access to various repayment options and a six-month grace period.
Ascent
Editorial Selection: Best for Student Support
- Undergraduates may be eligible for a free, exclusive coaching program
- 1% cash back reward upon proof of graduation
- Check your rate without impacting your credit
Ascent is one of the only private lenders on the market that offers student loans to borrowers without a cosigner. If you don’t qualify for federal loans and don’t have a cosigner, your lending options are much more limited.
- Fixed rates (APR): Between 3.22% and 13.61% for cosigned loans
- Variable rates (APR): Between 0.98% and 10.04% APR for cosigned loans
- Loan amounts: $2,001 to $200,000
- Rate reduction: 1% discount for automatic payments for non-cosigned loans and .25% discount for automatic payments for credit-based loans
- Repayment Terms: 5, 7, 10, 12, or 15 years
- In-school repayment options: Interest-only payments, $25 fixed payments, and deferred payments
- Grace Period: 9 months
- Cosigner Release: 12 consecutive on-time payments and must meet credit requirements
- Unique benefits: Students can get a 1% cash back bonus after graduation
What makes Ascent a good alternative
Borrowers who use a cosigner can remove them after 12 months of on-time payments. That’s a relatively short time frame compared to other lenders. Students will also receive a 1% cash back bonus after graduation.
Discover
Editorial Selection: Best Good Grades Reward
- Get a cash reward when earning good grades
- There are no fees
- Student loan specialists based out of the U.S.
Discover offers both undergraduate and graduate student loans with fixed and variable interest rates. Borrowers can take out the full cost of attendance, and Discover offers various options for in-school repayment.
- Fixed rates: Between 4.99% and 13.99% APR
- Variable rates: Between 2.99% and 12.59% APR
- Rate reduction: 0.25% interest rate discount for automatic payments
- Loan amounts: Up to 100% of the cost of attendance
- Repayment terms: 15 years
- Fees: No prepayment, origination, or late fees
- Cosigner release: Not available
- In-school repayment: $25 fixed payments, interest-only payments, and deferred payments
- Grace period: 6 months
What makes Discover a good alternative
While Discover only offers one repayment term option, they do not charge borrowers late fees. If you accidentally miss a payment, you won’t be punished. They also have the standard six-month grace period and a .25% interest rate discount for automatic payments.
