Education Lenders, Guarantee Agencies, Servicers and Secondary Markets

This section of presents information about banks, credit unions, savings & loan associations, and other financial institutions that provide funds to students and parents for educational loans under the Federal Family Education Loan Program (FFELP) and private education loan programs (also known as alternative loan programs). (Schools that participate in the Federal Direct Student Loan Program (FDSLP) do not use a private lender for the Stafford and PLUS loans, since loan funds are provided by the US Government.)

Several different types of organizations are involved in the management of student loans:

  • Education lenders originate student loans.
  • Guarantee agencies insure the loans against default.
  • Secondary markets buy loans from the lenders, providing them with the capital they need to originate new loans.
  • Servicers provide customer service and account management services.
  • Collection Agencies collect debt from students who have defaulted on their student loans.

There is a lot of overlap among these organizations. Many education lenders not only originate student loans, but also service those loans and purchase loans from other lenders.

The discussion of student loan discounts includes comparison charts of the Stafford loan discounts, PLUS loan discounts and consolidation loan discounts offered by these lenders.

Other Directories of Student Loan Organizations

Most student loans are originated by one of the top 50 lenders, which originate 83.5% of all FFELP loans, hold 93.9% of all FFELP loans, and consolidate 98.4% of all FFELP loans.

The Lender Codes Database may be used to obtain the lender codes of lenders that participate in the Federal Family Education Loan Program (FFELP). Be sure to obtain the correct lender code for your lender, as the lender code identifies the lender that will originate your student loans. Some lenders have multiple lender codes, and different lenders may have similar names.

There are several student loan comparison sites that rank loans based on either the best advertised rates, average rates or the actual rates.

The US Department of Education’s Financial Partners portal includes a directory of Guaranty Agencies, Lenders, Services, Trade Associations, State Grant Agencies, FFEL Schools, Secondary Markets and Direct Loan Schools. (One can also extract the list of Direct Loan Schools from the PEPS database, but this is complicated and does not provide a convenient consumer-oriented interface.)

Trade Associations for Education Lenders

National Council of High Education Resources, Inc. (NCHER), is a membership organization for organizations that are involved in the administration of federal and private education loans, including guarantee agencies, secondary markets, lenders, services, collection agencies, and schools. Founded in 1962, NCHER (pronounced “in-share”) represents its members on public policy issues to the federal government. Their web site includes a membership directory. NCHER hosts several annual conferences and conventions for its members. They also maintain committees in default management, program operations, program regulations, program regulations, membership services and training, public information, and school/lender relations. NCHER is perhaps most well-known in the industry for its efforts to standardize loan processing procedures, data formats, and software. NCHER’s web site also includes an extensive library of reference materials. For more information, please call 1-202-822-2106, fax 1-202-822-2142, write to National Council of Higher Education Resources, 1100 Connecticut Avenue NW, Suite 1200, Washington, DC 20036-4110, or send email to