Student & Parent Frequently Asked Questions

What is College Loan Market?

College Loan Market is an auction site for student loans. Under this model, the student submits a loan request to their school's instance of the College Loan Market. Their information is combined with credit information obtained by a national credit bureau (credit information is not used in the case of Stafford loan auctions) and then anonymized (that is stripped of all personally identifiable inormation) and then passed on to lenders in anonymized form. Lenders then compete for your business by bidding successively lower loan costs for your loan request. At the close of the auction period, you will be offered the opportunity to accept the lowest cost bid.

Shouldn't I just shop around myself?

Lenders will only provide you with a true rate quote once they know about your individual credit. Unfortunately, every time that you apply for credit, your credit is negatively effected. By using the auction process you gain access to multiple lenders without a comparable number of credit inquiries. The lenders can only bid if they are willing to beat the current leading bid. They have to give you their best deal if they want to win your business.

Do I have to pay to participate in the auction?

There is no charge for students or schools to use this service.

How is College Loan Market different from comparison sites?

College Loan Market is a reverse auction in which lenders bid for individual loans based upon anonymized information about the potential borrower. When student X visits College Loan Market and opens an auction for an alternative loan, they will receive a bid based upon their individual credit, course of study, degree sought and other factors. The bid for student Y will be different than student X’s based upon their differing factors. A student borrower receives a specific rate and fee quote which is factored into a total cost of funds. Comparison sites simply display the range of rates offered by participating lenders. At a comparison site, the student who received an actual rate and fee quote through College Loan Market, would be told that the lender offers loans from between PRIME – 1% and PRIME + 7.75% with fees between 0% and 12%. In this case, the borrower has been told nothing that aids in the search for the best rate.

What is a reverse auction?

According to Wikipedia, “It is a type of auction in which the role of the buyer and seller are reversed, with the primary objective to drive purchase prices downward. In an ordinary auction (also known as a forward auction), buyers compete to obtain a good or service. In a reverse auction, sellers compete to obtain business.

How much money can I request?

You can borrow up to the total cost of your education, minus any other aid or loans. Be sure that you have taken the maximum allowable Stafford loan before taking any private loan.

Who are the lenders?

The lenders are leading lenders selected by your school, though we encourage schools to open their auction to all lenders.

What is an alternative or private loan?

Alternative, or private, student loans are loans for undergraduate and graduate students needing student loans to bridge the financial gap between college costs and traditional funding sources such as federal education loans, grants, and scholarships. These are credit based loans, subject to credit approval and requiring a satisfactory credit history to qualify. The quality of your credit history, or that of a co-signer, will determine the rate and fees which lenders will bid for your loan business.

Do I need a co-signer?

If you do not have an established credit history, a co-signer will improve the likelihood of your approval. Also, a co-signer with an established credit history may lower your loan rates and fees. Most undergraduate students will require a co-signer.

What happens if the winning bidder doesn't give me the loan at the bid rate?

Though unlikely, it is possible that the lender may decide to not complete the loan based upon additional information that you might provide them.  If this occurs, please contact problem-resolution@collegeloanmarket.com and we will attempt to resolve the issue or connect you with the next lowest bidder.

How can I get more information?

Please write to us at info@collegeloanmarket.com.

I'm ready to get started with the auction. What do I need to do?

Currently we are only offering school-specific auctions. Contact your school's Financial Aid office and ask them to replace their Lender List with an open, reverse auction and get lenders to compete for your business by offering lower rates and fees. Have your Financial Aid office send us an email at schools@collegeloanmarket.com, we can set up a school-specific auction, at no cost to your school or it's students, in a matter of days.