Bank of America Student Loans – Bank of America, like several lenders, offers student loans to assist finance their college experience. At first glimpse, several private student loans look the same, but there are distinctions worth noting.
Education loans are structured contrarily than other loans, and they provide unique benefits to borrowers.
It is very necessary to make distinctions between the types of loans Bank of America offers, so that you can make informed education financing decisions.
In this article, I will be emphasizing on the Bank of America student loan.
Campus One Student Loans
Bank of America is a student loan originator. When you are awarded student loans, as part of your federal financial aid package, you are permitted to choose your own lender. Bank of America can serve your needs in this area.
Bank of America handles the most common federal loans, including Stafford Loans, PLUS loans for parents, Graduate Student PLUS loans and Federal Consolidation Loans.
Stafford loans are issued as ‘dependent’ loans or as ‘independent’ loans. When determining financial aid needs for dependent students, the Department of Education considers parental income, as part of the financial aid application.
Independent student need relates only to the income and assets of the individual student. As a result, student loan borrowing limits are higher for independent students.
Private Bank of America Student Loans
Private loans from Bank of America are not tied to your federal financial aid offers. They are similar to other loans you’d request from banks and credit unions, in that eligibility is based on your credit history.
If you do not have a positive credit record, you might need a cosigner to get a private student loan.
However, there are some important considerations to be aware of when pursuing private student loans. Specifically, Bank of America offers two types of private student loans: those that are certified by your school and those that are not.
School Certified Loans
The two types of certified loans offered by Bank of America are Private Student Loans and Bank of America TERI Loans.
Private loans help fill gaps left when your other financial aid resources are exhausted. Private loans can be accessed by undergraduate and graduate students, and offer flexible repayment terms that sometimes require minimum monthly payments as low as $50.
Bank of America TERI Loans is aligned with a non-profit agency called The Educational Resources Institute. Founded in the year 1985, the Institute’s stated mission is to increase access to higher education for low-income students.
Since its founding, the group has aided over one million individuals. Update: Due to unusual market conditions, TERI has suspended all student loan programs.
The Institute continues to provide educational planning and advising services, and is working with lender partners to minimize the disruption of lending services.
The other private loans offered by Bank of America do not need to be certified by your school. One example is the Campus Edge Student Loan, which acts as a supplement to other federal financial aid.
It can be applied to education expenses like textbooks, dorm fees, and cafeteria meal plans.
Another non-certified BofA loan is the Education Maximizer Loan, which also acts as a supplement to federal loans and grants. You can use the money for any education-related expenses, with generous borrowing limits of up to $40,000 a year. Payments can be postponed until after you have graduated from college.
Bank of America Student Services
Although Bank of America has suspended student lending, the bank does offer some helpful student services. “Solutions for Students” is a convenient source of banking for college students. The service includes:
- Ebanking with no minimum balance
- Mobile Banking
- Budgeting Tools
- Online Statements
- Text alerts
The Bank of America Student Platinum Plus Visa Card is another resource for students. Designed with college students in mind, the card includes 4 years of free identity theft protection and no annual fees.
A competitive interest rate and a host of student-friendly services help you build your own credit, as you attend school.
Why doesn’t Bank of America offer student loans anymore?
Bank of America never formally announced why it shut down its private student loan program in the year 2008, but it came at the same time as two major changes:
- The 2008 recession. The recession led to a credit crunch, meaning that there was less money to go around for student loans and fewer profits to be made.
- Government-issued federal loans.Just before the recession, the government also started to move toward providing student loans itself, rather than through companies like Sallie Mae. The 2007 College Cost Reduction and Access Act cut government subsidies for private student loans, making them more expensive for banks to issue at competitive rates.
After ending its private loans program, Bank of America continued offering federal student loans until the year 2015.
Bank of America is only one of several big banks to back out of the student lending game since the year 2008, along with JPMorgan Chase.
1. What does it mean when you refinance a student loan?
Refinancing a student loan is when you take out a new loan to replace your current student debt. Student loan refinancing can involve multiple loans or just one.
By refinancing your loan, you could potentially get a lower interest rate, lengthen your term or just switch to a lender that offers better perks (like deferment if you want to go back to school.
2. Can my student loans be forgiven after 10 years?
It depends. The most popular student loan forgiveness program that can kick in after 10 years is the Public Service Loan Forgiveness Program.
This only applies to students with federal loans who’ve worked for the government or an eligible nonprofit for 10 years.
Depending on your profession, however, you might be able to get partial forgiveness even sooner and with private loans.
3. What is a PLUS student loan?
PLUS stands for Parent Loan for Undergraduate Students, but now it acts as a type of federal loan that parents, graduate students and professional students can take out to pay for school.
PLUS loans tend to come with higher rates and don’t have as much repayment options or perks as other federal loans.
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