College Ave vs MPOWER: Private student loans compared
College Ave Student Loans is the better choice for U.S. citizens, permanent residents, and international students who have a creditworthy U.S. cosigner, offering lower rates and flexible terms. MPOWER Financing is specifically designed for international students and DACA recipients who do not have a U.S. cosigner or credit history.
For parents, the decision often hinges on whether you are willing and able to cosign a loan to secure lower interest rates. For students, the choice depends on your citizenship status and ability to get approved. Choosing the wrong lender can mean facing higher interest costs or being denied altogether. This guide compares eligibility requirements, interest rates, repayment terms, and unique benefits to help you secure the funding you need.
Context: How private student loans differ
Before comparing specific lenders, it is crucial to understand where private loans fit in the financial aid landscape. Private student loans should generally be considered only after you have exhausted all scholarships, grants, and federal student loans. Federal options typically offer lower fixed interest rates and more robust borrower protections, such as income-driven repayment plans.
However, federal loan limits often do not cover the full cost of attendance, leaving a funding gap. This is where private lenders like College Ave and MPOWER come in. While federal loans have standardized terms for everyone, private lenders operate differently. They base approval and pricing on creditworthiness or future earning potential, meaning your choice of lender directly impacts your interest rate and total loan cost.
According to Betsy Mayotte, president of The Institute of Student Loan Advisors, “In general, federal loans should be your first stop, but private loans can be appropriate when you’ve maxed out your federal eligibility.”
College Ave and MPOWER represent two distinct approaches to private lending. College Ave operates like a traditional lender, prioritizing credit history and cosigners. MPOWER operates as a niche lender focused on access for international students who are often shut out of the traditional banking system. Understanding this fundamental difference is key to navigating the comparison below.
College Ave vs MPOWER: Quick comparison
To help you quickly identify which lender aligns with your profile, the table below outlines the core features of both College Ave and MPOWER. This high-level overview highlights the trade-offs between flexibility and accessibility.
| Feature | College Ave | MPOWER Financing |
|---|---|---|
| Best For | Domestic students & international students with a U.S. cosigner | International & DACA students without a cosigner |
| Citizenship | U.S. Citizens, Permanent Residents, International (w/ cosigner) | International (F-1, J-1), DACA, U.S. Citizens |
| Cosigner | Highly recommended (required for international students) | Not required |
| APR Ranges | Competitive Fixed and Variable rates | Standardized Fixed rates only |
| Origination Fees | $0 | Typically 5% (added to loan balance) |
| Loan Terms | 5, 8, 10, or 15 years | 10 years |
| In-School Payment | 4 options (including full deferment) | Interest-only payments required |
| Autopay Discount | 0.25% | 0.25% |
Source: College Ave and MPOWER Financing websites (rates and terms current as of February 2025)
How to interpret this table: If you are a U.S. parent or student with good credit, College Ave offers significantly more flexibility regarding how long you have to repay and whether you make payments during school. If you are an international student without a U.S. support system, MPOWER offers a path to funding that College Ave does not, even though the terms are less customizable.
Eligibility requirements: Who qualifies for each lender
The most significant difference between these two lenders is who they accept. Your citizenship and access to a cosigner will likely dictate which option is available to you.
College Ave follows traditional private lending criteria. To qualify, you generally need to be a U.S. citizen or permanent resident. International students can apply, but only if they have a creditworthy cosigner who is a U.S. citizen or permanent resident. Approval relies heavily on credit history and debt-to-income ratio.
Most undergraduates will need a cosigner to meet College Ave’s credit requirements and secure competitive rates. For parents, this means your credit score directly influences your child’s ability to borrow. You can learn more about the implications of this in our guide to cosigning student loans.
MPOWER is built specifically to serve students who are often excluded by traditional banks. They lend to international students (F-1 and J-1 visa holders), DACA recipients, and asylum seekers. The primary differentiator is that MPOWER does not require a cosigner.
Instead of relying on U.S. credit history, MPOWER evaluates your future earning potential. However, according to MPOWER Financing, they have stricter school requirements; you must be attending one of the roughly 400+ schools in the U.S. and Canada that MPOWER supports. They generally require you to be within two years of graduating, focusing on students who are closer to entering the workforce.
Interest rates and fees compared
When calculating the cost of borrowing, you must look beyond just the headline interest rate. Fees and rate structures play a major role in the total amount you will repay.
According to College Ave Student Loans, as of February 2025, they offer both fixed rates of 3.49% - 12.99%2 and variable rates of 1.19% - 11.98%2 that are highly competitive for borrowers with excellent credit. They do not charge any origination fees, application fees, or prepayment penalties. This means 100% of the money you borrow goes toward your tuition and expenses.
Borrowers can also reduce their rate by 0.25% by enrolling in automatic payments. Because College Ave uses risk-based pricing, the better your (or your cosigner’s) credit score, the lower your rate will be.
MPOWER offers fixed interest rates only, providing predictability for borrowers who want to know exactly what their payments will be after graduation. However, MPOWER rates are generally higher than the lowest rates available from lenders requiring cosigners, reflecting the higher risk of lending without collateral.
Crucially, according to MPOWER Financing, they typically charge an origination fee of 5% of the loan amount, which is added to your loan balance. For example, on a $10,000 loan, a 5% fee adds $500 to your debt immediately. Like College Ave, MPOWER offers a 0.25% interest rate discount for setting up autopay.
Repayment terms and options
Flexibility during repayment can make managing monthly budgets easier for recent graduates. Here, the two lenders offer very different levels of customization.
College Ave is known for its “build-your-own-loan” approach. According to College Ave Student Loans, borrowers can choose repayment terms of 5, 8, 10, or 15 years. Shorter terms generally result in lower interest rates but higher monthly payments, while longer terms lower the monthly burden but increase total interest costs.
Additionally, College Ave offers four in-school repayment options:
- Full Principal & Interest: Pay the full amount immediately to save the most money.
- Interest-Only: Pay only the interest charges each month to prevent balance growth.
- Flat Payment: Pay a small fixed amount (e.g., $25) monthly to keep habits active.
- Deferred: Make no payments until after graduation (results in the highest total cost).
According to MPOWER Financing, they take a more streamlined approach with fewer options. The standard repayment term is 10 years. While in school and for six months after graduation, borrowers are required to make interest-only payments. There is no option to fully defer payments while in school.
While this lack of deferment might seem strict, it prevents the loan balance from growing while you study. By covering the interest as it accrues, you ensure that you don’t graduate owing more than you originally borrowed. For more on managing these payments, see our student loan repayment strategies.
Unique features and benefits
Beyond the numbers, both lenders offer specific benefits designed to support their target demographics.
For parents concerned about their long-term liability, according to College Ave Student Loans, they offer a cosigner release option. After more than half of the scheduled repayment period has elapsed, the primary borrower can apply to release the cosigner from the loan, provided they meet specific income and credit requirements.
According to Mark Kantrowitz, financial aid expert, “Cosigner release is a valuable feature offered by some private lenders, rewarding responsible repayment.” College Ave also partners with career services to help students find internships and jobs, potentially improving their ability to repay.
According to MPOWER Financing, they provide services essential for international students. They offer visa support letters to help students prove they have sufficient funds to study in the U.S., a common hurdle for obtaining an I-20. Furthermore, payments made to MPOWER are reported to U.S. credit bureaus, helping international students build a U.S. credit history—a vital step for renting apartments or getting credit cards in the future.
If you are an international student hoping to stay in the U.S. after graduation, MPOWER’s credit reporting feature serves a dual purpose: funding your education and establishing your financial identity in the American system.
Borrower protections and hardship options
Life doesn’t always go according to plan, so understanding what happens if you cannot make payments is essential. While private loans generally lack the extensive protections of federal student loans, both lenders offer some safety nets.
According to College Ave Student Loans, they offer up to 12 months of forbearance over the life of the loan for borrowers experiencing financial hardship, applied in 3- or 6-month increments. They also offer loan discharge in the unfortunate event of the student borrower’s death or total and permanent disability.
MPOWER understands the unique challenges international students face, such as visa issues or difficulty securing U.S. employment. According to MPOWER Financing, they offer a six-month grace period after graduation and have forbearance options for borrowers facing unemployment or other financial difficulties. However, neither lender offers income-driven repayment plans, meaning your monthly payment amount is generally fixed regardless of your salary.
Decision framework: Which lender is right for you
If you are still weighing your options, use this checklist to decide which lender aligns best with your specific situation.
- You are a U.S. citizen, permanent resident, or have a creditworthy U.S. cosigner.
- You have strong credit (or a cosigner with strong credit) and want the lowest possible interest rate.
- You want the flexibility to choose your loan term (5-15 years) to manage monthly payment size.
- You prefer the option to defer all payments until after graduation.
- You are an international student or DACA recipient.
- You do not have access to a U.S.-based cosigner.
- You are attending one of MPOWER’s approved schools in the U.S. or Canada.
- You want to build a U.S. credit history while completing your degree.
If you fit the College Ave profile, comparing rates is your next logical step. If you fit the MPOWER profile, verify that your school is on their approved list before applying.
Frequently asked questions
Yes, but options are limited. MPOWER Financing is one of the few lenders specifically designed to lend to international students without requiring a U.S. cosigner. They evaluate your future earning potential rather than U.S. credit history.
Yes, College Ave lends to international students, but they require a cosigner who is a U.S. citizen or permanent resident with good credit. International students cannot apply on their own with College Ave.
Generally, College Ave offers lower interest rates for borrowers with excellent credit (or those with creditworthy cosigners). MPOWER’s rates are typically higher because they take on more risk by lending to students without credit history or collateral.
Yes, you can refinance private student loans after you graduate. If you secure a job and build good credit, you may be able to refinance specifically to lower your interest rate or remove a cosigner. See our guide to refinancing for more details.
Both lenders have entirely online application processes. You can check your rate on College Ave’s website in about three minutes without affecting your credit score. MPOWER also offers a digital application that focuses on your academic and career potential.
Choosing between College Ave and MPOWER largely comes down to your citizenship status and access to a cosigner. College Ave is the strong choice for domestic students and families seeking competitive rates and repayment flexibility. MPOWER provides a vital lifeline for international and DACA students who need funding without the barrier of a cosigner requirement.
Remember to borrow only what you need to cover essential education costs. Before signing any loan agreement, review the terms carefully and calculate your estimated monthly payments to ensure they align with your expected post-graduation income.
Key takeaways:
- College Ave is best for borrowers with U.S. credit history or a cosigner, offering customizable terms and competitive rates.
- MPOWER is best for international and DACA students, removing the need for a cosigner or U.S. credit history.
- Compare rates: If you are eligible for both, compare personalized rate quotes to see which offers the lower total cost.
- Federal first: Always exhaust federal student loans before turning to either private lender.
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References and resources
For further research and to verify the information provided, consult the following resources:
- StudentAid.gov – Official source for federal financial aid information.
- College Ave Student Loans – Official lender website.
- MPOWER Financing – Official lender website.
- College Finance: Private Student Loans Guide
- College Finance: Federal Student Loans Guide
- College Finance: Student Loan Cosigner Guide
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