As the cost of college continues to rise, students and parents are turning more and more to student loans to get by on savings, grants, and federal loans. Of the private lenders, College Ave Student Loans stands out with competitive interest rates, payback terms that can be modified to fit individual needs, and a simple application process. Founded in 2014, College Ave is a trusted private student lending brand that offers loans to undergraduate students, graduate students, and parents. This article discusses the features, benefits, and aspects to consider regarding College Ave Student Loans to help prospective borrowers make effective decisions on how to finance their education.
Understanding College Ave Student Loans
College Ave provides private student loans to cover as much as 100% of the school-authorized cost of attendance, including tuition, fees, room, board, and textbooks. Federal student loans, by contrast, are funded by the government and received through the Free Application for Federal Student Aid (FAFSA). College Ave loans are issued by private banks (Firstrust Bank, First Citizens Community Bank, or M.Y. Safra Bank), and a credit check is required. These loans are created for students who reach the eligibility maximum of federal aid or who need additional funding to cover education expenses.
College Ave offers several options for loans, including:
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Undergraduate Loans: For those pursuing associate's and bachelor's degrees, with 5, 8, 10, or 15-year terms.
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Graduate Loans: For master's, doctoral, or professional degree pursuers, with up to 20-year terms for specified programs.
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Career Loans: For students in specific programs (e.g., nursing, pharmacy) at specific schools, with loan balances of up to $80,000 for undergrads and $150,000 for health professions.
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Professional Loans: For dental (DDS/DMD), medical (MD/DO/DVM), law, and MBA programs, with longer grace periods for residencies or bar study.
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Parent Loans: For parents or sponsors borrowing for a student, with repayment terms of 5 to 15 years.
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Refinancing Loans: Student debt consolidation borrowers, with terms of repayment between 5 and 20 years and values of loan up to $150,000 (and up to $300,000 for medical-related professional fields).
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Key Features of College Ave Student Loans
1. Competitive Interest Rates
College Ave offers fixed and variable interest rates starting at 3.47% fixed and 5.59% variable (as of 2024, with autopay discount). Fixed interest has steady payments, while variable interest, tied to the Secured Overnight Financing Rate (SOFR), can fluctuate. Borrowers with good credit or a creditworthy cosigner are eligible for lower interest rates, even equaling federal loan rates for those with excellent credit. A further 0.25% autopay discount reduces costs.
2. In-School Payment Flexibility
College Ave has four in-school payment options for undergrad and grad loans, allowing borrowers to customize payments to suit budget:
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Full Principal and Interest: Pay the principal and interest upfront, reducing costs on long-term interest.
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Interest-Only: Pay only interest in school, reducing the monthly cost.
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Flat $25 Payment: Pay a flat $25 monthly, paying off some of the interest.
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Deferred: Do not pay anything after a grace period (six months for undergraduate, nine months for most graduate loans), although there is interest that makes the amount larger.
Parent loans require at least interest-only payments in school, with no deferment available. These alternatives grant borrowers the freedom to match short-term finances and long-term repayment objectives.
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3. No Origination or Prepayment Fees
Unlike some federal loans, with origination fees (1.057%–4.228%), College Ave loans have no application, origination, or prepayment fees. This reduces the upfront cost and allows for early payoff of loans without penalty, with savings of interest.
4. Quick and Convenient Application
The three-minute web application offers instant credit determinations. Applicants need a Social Security number, be a student at an approved school, and be making satisfactory academic progress (SAP) according to their school. International students will require a cosigner who is a U.S. citizen or a permanent resident. The streamlined method and prequalification tool enable applicants to compare rates without a hard inquiry into their credit rating, which preserves their credit rating.
5. Peace of Mind for Multi-Years
College Ave's Multi-Year Peace of Mind plan preapproves 90% of undergraduate borrowers with cosigners for subsequent loans to fund the entire degree, removing the stress of having to reapply annually. This benefit offers funding stability for multi-year programs.
6. Cosigner Support
Most undergrads (98%) must be cosigned since they have little income or credit. A cosigner with good credit lowers rates and boosts approval probabilities. Borrowers may request cosigner release after paying for over half of the repayment term (e.g., five years on a 10-year loan), if they have made 24 consecutive payments and are earning income levels.
College Ave Benefits
1. Customized Loan Options
College Ave has a range of loan options that are customized to specific needs, from dental school through part-time attendance at community college. Extended grace periods for professional degrees (36 months for medical school, with up to 48 months for residency) provide flexibility for students in highly competitive fields.
2. Strong Customer Support
College Ave earns praise for its responsive customer service, which is available via phone (9 a.m.–9 p.m. ET, Monday–Friday), text message, live chat, or email. The lender's A+ Better Business Bureau rating and high Trustpilot ratings reflect positive customer experiences. Educational materials, including calculators, FAQs, and articles, teach borrowers to make informed decisions.
3. Financial Literacy Focus
College Ave emphasizes borrower education through videos, blogs, and budgeting and loan repayment brochures. These resources, which are given to schools and students, promote prudent borrowing and financial success.
4. Scholarship Opportunities
College Ave offers a no-essay $1,000 monthly scholarship sweepstakes to assist in offsetting the expense of education. College Ave is also a sponsor of initiatives like the College Ave Kickoff Scholarship Sweepstakes with the Philadelphia Union, which awards a $5,000 scholarship to fans.
Considerations and Limitations
Although College Ave is a good option, borrowers should also consider potential downsides:
1. Credit Requirements
Approval and terms are credit-dependent. Students with bad credit often need a cosigner, and cosigners must have a mid-600s credit score. Students with bad credit or no cosigner may be offered higher rates or turned down.
2. Limited Protections
Unlike federal loans, private loans like College Ave do not offer income-driven repayment, federal forgiveness, or general forbearance. When money trouble comes, borrowers may not have the same options for relief.
3. Refinance Rates Higher
Refinance rates are higher than new loan rates, even nearly double, which makes College Ave less competitive to refinance compared to other institutions.
4. No Branch Offices
As a fintech lender, College Ave operates entirely online, which may inconvenience borrowers preferring in-person support. However, robust digital and phone support mitigates this issue.
Tips for Borrowing with College Ave
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Exhaust Federal Aid First: Federal loans often offer lower rates and more protections. Complete the FAFSA to maximize grants, scholarships, and federal loans before turning to private options.
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Borrow Only What You Need: Project costs and payments with College Ave's calculator. Guideline: keep total loans at your estimated post-grad income divided by 1.5 so you can manage payments.
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Shorter Terms are Better: Opt for shorter payment terms (e.g., 5 or 8 years) to pay less interest, if possible. Small in-school payments also reduce the loan amount.
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Compare Lenders: Shop around and compare terms, rates, and benefits from other private lenders like Sallie Mae or Earnest. College Ave's prequalification tool makes it easy without impacting your credit.
Conclusion
College Ave Student Loans offers a solid choice for paying for college, offering flexible repayment terms, competitive rates, and a simple application process. Its tailored loan offerings, cosigner features, and commitment to money intelligence make it an ideal choice for undergrads, graduate students, and parents. Borrowers should consider credit needs and the lack of federal loan protection, however. By exhausting federal aid, borrowing strategically, and leveraging College Ave's resources, students can pay for school with confidence and position themselves for a successful financial future.
