One of the largest banks in the world, Bank of America, used to be king in the student loan industry. Over time, that has changed. Do you still have Bank of America student loans that have changed lenders over time? If so, let’s take a look at what happened to Bank of America student loans, what alternatives are available, and how to take charge of your student loans.
The history of Bank of America student loans
Bank of America (BofA) was heavily involved in the student loan industry. In 2007, it was the third-largest student loan lender in the United States and held $900 million in private student loans.
In 2008, however, Bank of America student loans stopped being offered to customers. According to former executive Sandra Dunleavy, “Bank of America is focusing our student loan strategy on the federal student loan program and discontinuing private loan products for the coming academic year.”
This was just the beginning of BofA’s exit from the industry, though. A decade later, BofA sold off over $2.7 billion in student loans, made up mostly of Federal Family Education Loans, a program that ended in 2010. BofA was officially no longer in the student loan business.
Bank of America stopped offering student loan products
Currently, Bank of America has no affiliation of any kind with student loans. It no longer originates loans and is not accepting new applications for student loans. The only mention of student loans on the Bank of America website is an FAQ section. In the section, BofA states:
“Bank of America has suspended the origination of federal student loans and is no longer accepting new applications for Stafford, PLUS or Graduate PLUS loans. If you have any questions about obtaining a new student loan, please contact your school’s financial aid office.”
If you had BofA student loans, you should have received information regarding the new lender and servicer. If for some reason you don’t know who owns your loan, you can find that information on your credit report. You can access your free credit report at AnnualCreditReport.com.
Other lenders to consider
Now that Bank of America student loans are no longer offered, you may be looking for another private student loan lender. Private loans are a great way to pay for education expenses when federal assistance doesn’t cover all of your college expenses. There are many lenders to consider, so it’s important to take time and compare them all to find the one that suits your needs. Here are some private lenders that are good alternatives to Bank of America student loans:
Known for its refinancing, CommonBond also offers several private student loan options. CommonBond has low rates for qualified borrowers. There are no application fees or prepayment fees, but some of their loans do have a 2% origination fee. Some CommonBond loans are eligible for cosigner release.
College Ave has private student loan options for almost everyone. Interest rates are low for qualified borrowers, plus there’s a 0.25% interest rate reduction for choosing the autopay option. College Ave loans have no application, origination or prepayment fees.
LendKey is not your typical lender. While it offers private undergraduate and graduate student loans, it acts as a middleman, working between lenders and credit unions and community banks. Most loans will require a cosigner. LendKey has low rates and a 0.25% rate reduction for choosing autopay.
Credible is a student loan marketplace that allows you to compare multiple private lenders. Search undergraduate and graduate loans to find the best rates. A major perk is you only have to apply once, not separately for multiple lenders. Head to Credible, enter some personal and financial information and see what loan options are available for you.
Make sure you’ve exhausted all federal loan options before looking at private student loans. For more help, search our complete list of private lenders for 2019.
The potential future of big banks and student loans
While big banks have distanced themselves from the student loan industry, their focus could be turning back soon. Consumer Banking Association, a lobbying group, has been pushing for legislation that caps student loan assistance from the government for graduate students and parents of undergraduates. This effort is an attempt to bust up the $100-billion-a-year student loan business the government currently controls.
In the past, attempts of this nature have been squelched, but Congress and the Trump administration have been more receptive recently. If it comes to pass, this change could lead to big banks finding a home in the private student loan sector.
Although Bank of America student loans don’t exist right now, they could become a reality in the future. If federal loans get capped, jumping back into the private loan business makes a lot of sense for BofA. Because of its size, the market opportunity has to be huge for BofA to get involved. The bank got out of the student loan industry when the market shrank, and now that the industry might change in its favor, BofA may make a return.
Refinancing Bank of America student loans
If you’re still paying off a student loan that originated with Bank of America, you may be able to save money by refinancing. This is especially true if you had private BofA student loans.
If your credit is excellent or you use a cosigner with stellar credit, you may be able to secure a much lower interest rate than you have with your current loan. Refinancing could potentially trim thousands of dollars of interest payments over the life of your loan.
When you refinance federal loans formerly managed by BofA, your federal loans will become private loans. You will lose access to federal protections such as income-driven repayment plans, loan forgiveness, and forbearance. Make sure you won’t need access to any of these programs before committing to private loan refinancing.