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Bank of America, the second-largest commercial bank in the U.S., no longer offers student loans, according to the Federal Reserve. It left the student loan industry over a decade ago and hasn’t looked back.
If you previously had a Bank of America student loan or you are a current student in need of financing, carefully consider your funding options.
Did Bank of America Offer Student Loans?
Bank of America offered private student loans and originated and serviced loans under the Federal Family Education Loan (FFEL) program. Government-based loans, like FFEL, accounted for 85% of its student loan portfolio.
The company ended its private student loan program in 2008 during the Great Recession and shifted its student loan business to FFEL program loans.
Congress later discontinued the FFEL program in 2010, prompting the bank to fully exit the student loan industry. A few years later, the bank began offloading its remaining FFEL loan portfolio to other loan servicers.
What Happened to Existing Bank of America Student Loans?
Bank of America’s private and federal student loan accounts were sold to new servicers.
Borrowers who had a federal loan from Bank of America can view their new servicer on FederalAid.gov. To access your information, log in using your Federal Student Aid ID.
Private student loans were sold to financial firms. You can check your credit report to see your current private Bank of America loan servicer. Through December 2023, you can request free weekly credit reports at AnnualCreditReport.com.
Bank of America Student Loan Options
Refinancing Student Loans
Since completely exiting student loans, Bank of America doesn’t offerr financing for its student loans. However, you can refinance your loans through a different lender.
If your refinancing application is approved, your refinance lender will cover your remaining balance and create a new private loan with a different interest rate and new terms for you to repay.
Refinancing can lower your interest rate, reducing your total debt sum. You can also choose a longer repayment term and make smaller, manageable monthly payments—this option will cost you more money in the long run.
Also, you miss out on beneficial programs, like income-driven repayment (IDR) plans and loan forgiveness when you refinance a federal loan.
Direct Consolidation Loan
If you have multiple federal student loans and prefer to stay within the federal student loan system, consider a direct consolidation loan. This approach helps if you want to:
- Access to forgiveness options
- Extend your repayment term
- Switch to a fixed interest rate
- Access to IDR plan options
- One monthly student loan payment
However, be careful about choosing a direct consolidation loan. Any unpaid interest from your original loans becomes part of the principal balance, so your interest capitalizes—meaning, you’ll pay interest on your interest.
Alternatives to Bank of America Student Loans
Actively enrolled students can’t seek out new Bank of America student loans to finance their education. However, there are many alternative student loan opportunities to explore.Federal Student Loans
The Department of Education offers several standard and need-based fixed-rate student loan programs. Also, the William D. Ford Direct Loan program offers direct subsidized, direct unsubsidized and PLUS loans.
Eligibility varies depending on the program. However, only direct PLUS loans require a credit check. PLUS loans are only available to graduate or professional students and parents of undergraduate students.
To apply for federal student loans, submit a Free Application for Federal Student Aid (FAFSA) at StudentAid.gov.
Other Private Student Loan Lenders
Federal student loans should be your first option after scholarships and grants. However, federal loans have annual and aggregate borrowing limits that should be considered.
Private student loans are provided by banks, credit unions, online lenders and other financial institutions. They also require a credit check, although some lenders allow a co-signer with good credit on your application if you don’t have strong or established credit.
Private lenders can set their own interest rates and terms at their own discretion, so compare multiple private student loan offers before choosing one.
How To Search and Compare Student Loan Options
Every borrower has unique financial aid needs. Whether you have an existing Bank of America student loan or are looking for a new loan to continue your education, here are a few tips to help you find a loan:
- Maximize federal student loans. Federal loans offer the most benefits and protections in terms of interest rates, payment programs and other components. Consider government-backed loans first if you’re looking for student aid.
- Check your budget. Examine your monthly budget to determine what you can afford on a future refinanced loan.
- Compare interest rates. Compare at least three private student loan or refinance loan rates to find the best deal. Rates can be either fixed or variable, which could impact your interest payments.
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