Citibank Student Loans: What Happened & Alternative Lenders
In 2017, Citibank stopped offering student loans. If you were considering a student loan through Citibank, there are a variety of other options available.
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Citibank stopped offering student loans in 2010 when they sold their student loan division, The Student Loan Corp.
As a result of the sale, Sallie Mae took over $26 billion of Citi’s federal student loans, the Department of Education assumed $4.7 billion in federal loans, and Discover took over $4 billion in private student loans.
Citi did purchase back a small portion of their private and federal student loans (yes, it’s confusing) but they finished servicing all remaining loans in 2017.
To summarize, Citi is no longer offering student loans, and though they previously offered a refinancing option, that too has been discontinued.
In this review:
- Citi Student Loan Servicing Fined by the CFPB
- Alternatives to Citibank Student Loans
- Refinancing Citibank Student Loans
Citi Student Loan Servicing Fined by the CFPB
Despite stopping all the student loan activity, including removing information from their website and product catalog, Citi’s student loan story doesn’t end there.
Unfortunately, for both customers and Citi alike, the Consumer Financial Protection Bureau (CFPB) fined the lender for illegal student loan servicing practices, such as misleading borrowers and inaccurate late fees.
As a result, Citi had to pay a $2.75 million fine and return $3.75 million to affected borrowers.
Will I Receive a Refund from Citi?
The legal activity and subsequent retribution came to a head in 2017, and many student loan borrowers that had loans serviced by Citibank between 2006 and 2015 were eligible for a refund between $47 and $250.
Borrowers who still had education loans serviced by Citi at the time of retribution should have received a statement credit on their account. If impacted loans were paid off or eventually serviced by another company, then Citi was required to send a refund check via mail.
In other words, if you were eligible, you should have received a credit by now. However, to find out more about the CFPB’s action against Citibank, you can visit the CFPB website.
Alternatives to Citibank Student Loans
Though securing a student loan through Citibank is out of the question, there are many other private student loan companies out there who provide loans to eligible borrowers in need of financial aid.
You can either check out our Best Private Student Loans Guide or continue on to learn about two of our top choices.
College Ave Student Loans
Fixed Rates
4.39% – 11.98% (APR)
Variable Rates
1.79% – 10.97% (APR)
Loan Amounts
$1,000 – 100% of school-certified cost of attendance
LendEDU Rating: 5/5
College Ave is one of our top choices for private student loans, making it a great Citibank student loan alternative. The lender offers loans for undergraduates, graduate programs (including health professions), career training, and parents of students attending college.
Here are some highlights of the undergraduate student loan:
- Soft-Credit Check: Yes; soft credit check for preapproval
- Repayment Terms: 5, 8, 10, or 15 years
- In-school repayment options: Full deferment, $25 monthly, interest-only, full principal & interest
- Grace Period: 6 months + option to apply for 6 more
- Cosigner Release: Yes; after 24 on-time monthly payments
- Unique benefits: You can apply and receive a credit decision within 3 minutes
Earnest
Fixed Rates
4.39% – 12.78% (APR)
Variable Rates
2.74% – 11.44% (APR)
Loan Amounts
$1,000 – 100% of school-certified cost of attendance
LendEDU Rating: 4.77/5
Earnest is an online lender offering student loans as well as student loan refinancing and is another great alternative if you were hoping to get a student loan from Citi. The company has a loan product for undergraduates as well as students attending different levels of graduate school.
Here are some highlights of Earnest’s undergraduate student loans:
- Soft-Credit Check: No but there is an eligibility check
- Repayment Terms: 5, 7, 10, 12, or 15 years
- In-school repayment options: Options include full deferment, flat payments, interest-only payments, and full principal & interest payments
- Grace Period: 9 months
- Cosigner Release: No, but you can release your cosigner if you refinance
- Unique benefits: Skip one payment per year, biweekly autopay
Refinancing Citibank Student Loans
If you have Citibank student loans, you may be able to refinance them to lower your interest rate and/or monthly payment if you have a good credit score and steady track record or making on-time payments.
You can use our guide to the Best Student Loan Refinance Lenders or our guide to Deciding if You Should Refinance Your Student Loans to learn more.
Bottom Line: Citi Student Loans Aren’t Your Only Option
Though Citibank once offered loans to student borrowers, due to a somewhat jaded history, the financial organization no longer originates or refinances student loans.
If you were considering a Citibank student loan, you’ll have to look elsewhere, though there are a variety of comparable lenders, including SunTrust and Sallie Mae.
