Alternatives to Bank of America Student Loans
Bank of America stopped issuing new student loans. Find out what that means for borrowers who previously took out loans through the company and find alternative lenders who you can either refinance with or apply to take out new loans through.
Bank of America is one of the largest banks in the world, and at one point, was one of the largest issuers of student loans. They offered both private and federal loans and even offered non-certified student loans like the Education Maximizer Loan and the Campus Edge student loan.
But this changed in 2008 when the company stopped offering private loans altogether. Between 2014 and 2017, the company sold off its entire $3.9 billion student loan portfolio.
Bank of America still has a portal for borrowers who need to repay their loans, but they are no longer issuing new student loans to borrowers. As a result, many people are looking for alternative lenders.
This article discusses why Bank of America student loans was stopped and what that means for borrowers who previously took out loans through the company. It will also discuss some alternative lenders you can either refinance with or apply to take out new loans through.
On this page:
- The History of Bank of America Student Loans
- Options If You Still Have Bank of America Student Loans
- Alternative to Bank of America Student Loans
The History of Bank of America Student Loans
In 2008, Bank of America announced it would stop offering private student loans and other student loan options to borrowers to cover education expenses. The company began to sell off its private loan portfolio and began focusing on student loans sponsored by the federal government.
Like many lenders, Bank of America made the switch after deciding the student loan market was unprofitable due to the ongoing 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.
This 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 federally-backed student loan portfolio. They placed their $2.7 billion loan portfolio for sale.
Since Bank of America once offered both federal and private student loans, there are still many borrowers repaying loans they took out from Bank of America. Borrowers are required to repay their loans, but if they’re dissatisfied with the service they’ve been receiving from Bank of America, they do have options.
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Options If You Still Have Bank of America Student Loans
Due to Bank of America’s shift away from student lending, it has not been a primary focus for the company. This has led many borrowers to feel unhappy with the service they are receiving and wonder if they could receive better rates elsewhere.
Fortunately, borrowers who meet certain eligibility requirements should be able to refinance their private or federal student loans. It should be noted that refinancing student loan debt is different from student loan consolidation. Let’s look at several alternative private student loan programs you can consider.
Alternative to Bank of America Student Loans
Refinancing is always a good alternative for borrowers who feel unhappy with their current higher education loans. And if you have multiple student loans, you may also want to consider consolidating them into one new loan.
When you refinance your student loans, the new lender pays them off and gives you a new loan with different terms. The borrower benefits by either receiving a lower interest rate or a lower monthly payment.
You must have a good credit score and credit history, a stable income, and a low debt-to-income ratio to qualify for student loan refinancing. If you don’t meet the requirements, having a cosigner will increase your chances of being approved as a student borrower.
Below, we’ll go over two private student loan lenders you might want to consider. Both give you the option to either refinance your current loans or take out new loans as a college student.
Citizens Bank Student Loans
5.25% – 12.09%
4.47% – 12.34%
5, 10, or 15 years
Citizens Bank offers student loan refinancing as well as new private loans. Their private student loans range from a loan amount of $1,000 to $175,000. Their current variable rates start at 4.48% APR and fixed rates currently start at 5.25% APR.
Citizens Bank lets borrowers decide whether they want to make full payments, interest-only payments, or defer their payments entirely while they’re still in school. Once they’ve graduated, borrowers can choose between a 5, 10, or 15-year repayment plan.
Citizens Bank won’t charge any application or origination fees on their loans. And you could earn a rate discount by enrolling in autopay.
College Ave Student Loans
5.29% – 12.78%
4.07% – 11.32%
5, 8, 10, or 15 years
College Ave was founded in 2014 and they offer student loan refinancing and private loans. Their private student loans range from $1,000 to $175,000. Their current rates include fixed rate loans starting at 5.29% APR and variable rates starting at 4.07% APR.
Borrowers who don’t have a good credit score will be required to apply with a cosigner. But the company allows you to apply for a cosigner release after 24 months of consecutive, on-time payments.
There are flexible repayment options available. Borrowers can choose whether they want to make interest-only or full payments while in school or defer them until graduation. And borrowers can choose either an 8, 10, 12, or 15-year repayment plan.
The 2008 financial crisis affected many banks, including Bank of America. The company used to offer a competitive product and was one of the largest companies in the student loan industry.
If you still have loans through Bank of America and are unhappy with the service you’ve been receiving, there are other options available. By refinancing them through another lender, you could be saving yourself money in the long run. And if you’re looking to take out a new loan entirely, there are many good lenders who can help you.
Author: Jeff Gitlen
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