Citibank Student Loans: What Happened & Alternatives

Citibank stopped offering student loans in 2010 when it sold its student loan division, The Student Loan Corporation. Most of its loans were sold to Sallie Mae, with Discover and the Department of Education taking on the rest.

Citi did purchase back a small portion of those loans for a short period before it finished servicing those remaining loans in 2017. Today, Citi does not hold or offer any student loans.

In this review, we’ll dive deeper into what happened to Citi student loans, explain what existing borrowers need to know, and review some alternative lenders for those needing new loans.

In this review:

What happened to Citibank student loans?
What if I already have student loans from Citibank?
Citi student loan servicing fined by the CFPB
Alternatives to Citibank student loans
Refinancing Citibank student loans

What happened to Citibank student loans?

Citi exited the student loan space to streamline its business offerings, especially in the aftermath of the Great Recession and new rules about student loans enacted by Congress.

In 2010, Citibank’s student loan division was split. Sallie Mae took over $28 billion of Citi’s loans, most of which were federally backed student loans. The U.S. Department of Education assumed $4.7 billion in federal loans, and Discover took over $4.2 billion in private student loans.

In 2017, Citibank sold its remaining student loans to Firstmark.

What if I already have student loans from Citibank?

If your Citibank loans were sold, you still have to pay them back. Citibank should have contacted you to tell you who the new servicer will be. If you don’t remember who the current servicer is, you can find that information on your credit report at www.AnnualCreditReport.com.

If you had federal student loans through Citibank, find your new loan servicer through the Federal Student Aid (FSA) website. You’ll have to log in with your FSA ID to see who the new servicer is.

Citi student loan servicing fined by the CFPB

In 2017, the Consumer Financial Protection Bureau (CFPB) fined Citi for illegal student loan servicing practices, such as misleading borrowers and charging inaccurate late fees. They were also accused of charging higher minimum payments and giving inaccurate information about tax deductions for student loan interest.

Citi’s loan servicing practices made it confusing and costly for many borrowers to repay their loans. As a result, Citi had to pay a $2.75 million fine and return $3.75 million to affected borrowers. Those affected by these practices were eligible to collect a refund ranging from $47 to $250.

Will I receive a refund from Citi?

If you had student loans serviced by Citibank between 2006 and 2015, then you may be eligible for a refund.

Borrowers who had loans serviced by Citi at the time of retribution should have received a statement credit on their account. If the impacted loans were paid off or serviced by another company, Citi was required to send a refund check in the mail.

In short, if you were owed a refund, you should have already received it. For more details on the action against Citibank, check out the press release from the CFPB.

Alternatives to Citibank student loans

While you can’t take out student loans with Citibank, there are many other student loan companies that you can consider. Check out our picks for the best private student loans, or read the lender reviews below.

College Ave

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Editorial Selection: Best Overall

Student loans for undergraduates, graduates, parents, and career training
Choose your repayment term and schedule
Get a decision in as little as 3 minutes

College Ave is our top choice for private student loans and is a great Citibank student loan alternative. They offer loans for undergraduate degrees, graduate degrees, career training, and parents of students.

Here are some highlights of its undergraduate student loan:

Fixed rates (APR): 3.22% to 13.95%
Variable rates (APR): 1.29% to 12.99%
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 24 on-time monthly payments and when you’re halfway through the repayment term
Unique benefits: You can apply and receive a credit decision within 3 minutes

Sallie Mae

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Editorial Selection: Best for Cosigners

Student loans for undergraduates, graduates, and career training
Cosigners can be released after 12 consecutive on-time payments

Sallie Mae offers undergraduate and graduate student loans and loans for career training programs. Borrowers have access to low interest rates and several in-school repayment options.

Here’s what you should know about Sallie Mae’s undergraduate loans:

Fixed rates (APR): 3.75% to 13.71%
Variable rates (APR): 2.62% to 12.97%
Loan amounts: $1,000 to 100% of school-certified costs
Repayment Terms: 5 to 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

Earnest

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Editorial Selection: Best for No Fees

Student loans for undergraduates, graduates, and parents
No origination, late payment, or application fees
Check your rate without impacting your credit

Earnest is an online lender offering student loans and student loan refinancing. They offer undergraduate and graduate student loans.

Here are some highlights of its undergraduate student loan:

Fixed rates (APR): 3.22% to 12.78%
Variable rates (APR): 1.34% to 11.44%
Loan amounts: $1,000 to 100% of the total costs
Soft-Credit Check: Yes, to prequalify
Repayment Terms: 5, 7, 10, 12, or 15 years
In-school repayment options: $25 fixed payments, interest-only payments, deferred payments, and full principal and interest payments
Grace Period: 9 months
Cosigner Release: Not available
Unique benefits: Skip one payment per year

Ascent

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Editorial Selection: Best for Eligibility

Student loans for undergraduates, graduates, and career training
Get 1% cash back with proof of graduation
Check your rate without impacting your credit

Ascent offers loans for undergraduate and graduate students, and is one of the few student loan companies that does not require a cosigner. They also offer loans for borrowers who have a cosigner.

Here are some highlights of its undergraduate student loan:

Fxied rates (APR): 3.22% to 13.09%
Variable rates (APR): 1.75% to 10.54%
Loan amounts: $2,001 to $200,000
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

Refinancing Citibank student loans

If you have Citibank student loans, you may be able to refinance them with a new lender to lower your interest rate and monthly payment. Refinancing is only available for borrowers with good credit and a steady track record of on-time payments.

Refinancing federal student loans will convert them into private student loans. This will mean giving up benefits like income-driven repayment plans, loan forgiveness programs, and more. You should think carefully before refinancing federal student loans.

If you’re interested in refinancing, use our guide to the best student loan refinance lenders or learn more with our guide to deciding if you should refinance your student loans.

Whether you refinance or not, you should still manage and track your Citibank loans, even if they were sold to a new servicer. Make sure you know the due date, how much you owe monthly, and who your lender is.