Citibank Student Loans: Alternatives to Consider
In 2017, Citibank stopped offering student loans. If you were considering a student loan through Citibank, there are a variety of other options, including private loans through SunTrust, Discover, and Sallie Mae that we review below.
Citibank stopped offering student loans in 2010 when they sold their student loan division, The Student Loan Corp., in a $600 million deal—a $500 million loss for Citi.
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 dollar 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 lenders out there who provide loans to eligible borrowers in need of financial aid.
Check out our Best Private Student Loans page to see other options or read on to learn more about some alternatives.
SunTrust Student Loans
SunTrust is a financial services company that offers customers a wide range of products including checking accounts, mortgages, personal loans, and of course, student loans.
Their student loan portfolio includes three primary products: The Custom Choice Student Loan, Union Federal Private Student Loan, and the Graduate Business School Loan.
The Custom Choice Student Loan and Union Federal Private Student Loan customers can borrow up to $65,000 for a 5, 7, or 10-year term, while Graduate Business School Loan customers can take out up to $95,000 for a 7 or 10-year term.
SunTrust’s loans currently have variable interest rates as low as 4.38% and fixed interest rates as low as 5.35%.
Discover Student Loans
As one of the companies that purchased a portion of Citibank’s loans, it makes sense to include this lender on the list. Discover, notable for their credit products, offers undergraduate and graduate loans as well as several concentration-specific products like MBA, health professional, and law loans.
Though rates and terms vary based on loan types, Discover student loans currently have variable interest rates as low as 4.84%1 and fixed interest rates as low as 6.34%1. Undergraduates have up to 15 years for student loan repayment while graduate borrowers have up to 20 years.
Discover’s lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
Sallie Mae took on a significant portion of Citibank’s loans back in 2010 and they remain one of the largest private student loan lenders today.
Like Discover, they offer undergraduate and graduate loans as well as numerous concentration-specific loan products. They also provide parent loans and even loans for K-12 learning.
Sallie Mae’s undergraduate and graduate loans can be used to cover all of a student’s academic expenses. Borrowers can expect loan terms between five and 15 years with variable rates currently as low as 4.62% and fixed interest rates as low as 5.74% for undergraduates and 6.25% for graduate borrowers.
Refinancing Citibank Student Loans
If you have student loans from Citibank and would like to see if you can save money on them or change your servicer, you could look into student loan refinancing. If you have a good credit history and steady track record or making on-time monthly payments, you may be eligible for a lower interest rate with a different private lender.
To learn more about how this works and to compare lenders, check out our guide to refinancing student loans.
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, Discover, and Sallie Mae.
Discover Student Loan Disclosures
- Lowest rates shown ARE FOR THE UNDERGRADUATE LOAN AND include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest INTEREST RATE OFFERED ON THE DISCOVER UNDERGRADUATE LOAN and highest interest rates offered on Discover student loans, including Undergraduate, Graduate, Health Professions, Law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.50% as of July 1, 2019. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please click here for more information about interest rates.
Author: Jennifer Lobb
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