College Ave Private Student Loan Review

Written by: Kimberly Burton
Updated: 7/09/24

Deciding on a college is a big step for many students. After choosing a location and filling out the application form, the next challenge is how to pay for tuition, books, room & board, and other expenses at your chosen school.  Some students are awarded scholarships, and savings can address some expenses, but often students and parents need to contemplate student loans.  In fact, 70% of college students take out one form of student loan. 

After looking at government programs through FAFSA (Free Application for Federal Student Aid), your next step might be to look at private student loans.

Comparing student loans is often like comparing apples to oranges, so we are here to help you take the guesswork out of the multitude of private student loan options available.

College Ave is one of these options.

About College Ave

College Ave’s mission is to simplify the student loan experience through a streamlined application process, competitive rates, and flexible repayment options.  They pride themselves on excellent customer service, offering multiple channels for support, including phone, email, and live chat.  

Founded in 2014 by 2 former Sallie Mae executives, College Ave has quickly established itself as a reliable choice for students and families seeking to refinance higher education.

College Ave has strategic partnerships with financial institutions, colleges, and universities, which has allowed the company to grow quickly and provide products that are tailored to a broad audience.

Note that College Ave is not a bank, but a company that facilitates student loans, while the lenders behind them are Firstrust Bank, First Citizens Community Bank, or M.Y. Safra Bank. They are all members of the FDIC.  

Ranking 10/10 due to its strong leadership team with extensive experience and credibility in the student loan space.

Our Process

As with all loans, there are several things to consider.  These will be based on where you are attending school, how much you need to borrow, your (and if you have cosigners) credit scores, interest rates of the loan, and repayment terms.

We’re going to outline the features of College Ave and how they compare to other lenders on a scale of 1 to 10 (A few factors we gave more weight to and those will be pointed out below.) 

Overall Ranking

After looking at more than 15 factors and comparing the most popular private student loans on the market, we’ve given College Ave 4.6 out of a possible 5 ranking. 

Keep reading to explore the details of applying for and obtaining a loan with College Ave and to understand how we arrived at this ranking.

Who Can Apply?

College Ave considers undergraduate students, who are at least 18 years old (or the age of majority in their state of residence) with a social security number and enrolled at least part-time at an eligible school.  Typically this includes accredited US colleges and universities.  Once you start the application process, there will be a list of qualifying schools.  

If you are not a US citizen, you need a cosigner who is a US Citizen or Permanent Resident. 

If you don’t meet financial, credit, or other criteria, a cosigner may be required.

When applying for loans to pay for the second, third, and subsequent years of college, College Ave also looks at satisfactory academic progress (SAP) guidelines outlined by their chosen school. SAP is measured by GPA, credit hours completed, and the time frame of the degree. If a student fails to meet these guidelines, further student loans can be withheld.

While this did not factor into our rankings, your choice of school is a big deciding factor on whether you can apply for this loan. SAP will factor in when applying for subsequent loans while in college.

What is the maximum loan amount?

A specific loan limit is at the discretion of College Ave.  They have a yearly limit of up to 100% of the school-certified cost of attendance.  Depending on your school, this can be quite high. 

The lifetime limit is based on creditworthiness and your chosen degree.  

To ensure you take out enough loans to pay for college, but not too much to have you drowning in debt, you’ll need to do some calculations.  One rule of thumb is to not borrow more than what you anticipate you will earn in your first year in the working world.  

Note: The limit did not factor into our rankings, but may be important to you depending on your financial needs.  If tuition at your chosen school is higher, you may need to look at multiple loans or a lender with higher loan amounts.  With College Ave, you won’t know until you apply and are approved.  Also, keep in mind the amount you’ll need for the entire college experience as you will need to apply each year with College Ave.

Are there any fees to apply? 

In addition to the cost of the student loan, there are often other costs the lender adds on to set up and maintain the loan.  These costs can add up, so you want to look for a lender that waives them.  College Ave does not charge origin, application or prepayment fees.  This allows borrowers to budget the cost of their student loans better.  More of the loan amount is available for actual education costs.

This is a definite pro.  The lower the fees, the more affordable the loan is over time.

Ranking 10/10 because less fees are always a plus!

Can I pay the loan off early?

Having one less bill to pay each month is great, so if you can pay off your loan early, that’s a definite advantage.  College Ave offers several repayment plans.

One way of paying down your loan is to pay a little extra each month.  As long as your loan payments are current, you can get ahead by applying the funds to the balance of your loan or applying it to next month’s payment. 

If you experience a windfall, check your loan payoff amount on the website, mobile app, or by contacting a representative. Note that the specific amount changes based on when interest is applied. 

College Ave offers various repayment options, including full principal and interest payments that begin immediately after securing the loan, interest only payments during school, a flat payment as low as $25 per month while in school, or deferred payments where you don’t start paying on the loan until you are out of school. 

Keep in mind that interest will accumulate no matter what option you choose so beginning payments as soon as possible will save money and build credit. On the other hand, not having to worry about payments until after graduation allows students to focus on their studies without immediate financial burden.

Borrowers can choose from various repayment terms, ranging from 5 to 15 years, allowing for more personalized repayment plans.

This is a pro, offering flexibility depending on your financial situation.

Ranking 10/10 because of multiple repayment options.

This brings us to a big difference between federal and private student loans.  For some students who end up with lower incomes after graduation, College Ave does not offer income-driven repayment plans on private student loans.  This is generally a feature reserved for federally-backed loans.

Ranking 8/15 based on other borrower benefits as an auto-debit from your account is required when paying off the loan. Note that we gave more weight to this category because it’s an important factor for borrowers when managing repayments.

College Ave allows a 6-month grace period before loan repayments are required. This can allow borrowers to get more established in their jobs before needing to factor in student loan payments.

Ranking is 8/10, as some lenders on our list allow longer periods.

Are there payment deferment options?

Private loans typically offer fewer deferment options compared to federal loans, making them less flexible if financial difficulties arise.

Private loans also lack federal protections, such as forgiveness programs and extensive deferment options, which can be crucial for some borrowers.

Plus, interest accrues during in-school deferment periods for unsubsidized loans, increasing the overall loan balance.

These features are a con with any private loan and not a disadvantage for College Ave alone. 

Ranking 10 out of 10 due to several deferment options, which we outlined in the payment section above.

Do I need a parent to cosign the loan?

While some students can qualify for student loans themselves, they likely will need a cosigner to qualify for a larger loan.  This person is generally a parent or a close relative with established good credit.  

There is an option to release the cosigner after a set number of on-time payments (usually 36), which releases the cosigner’s burden and allows the student to better their credit score.

We consider this a pro as it offers the cosigner an opportunity to release themselves from the loan if they choose.

Ranking 9 out of 15 due to the number of months before the release can occur. Note that we gave more weight to this factor with the highest lenders allowing release after 12 months of payments.

The better the credit rating of the borrowers or their cosigners will determine interest rates and loan amounts.  Good to excellent credit will qualify for the best rates. Establishing a strong credit history or finding a qualified cosigner with excellent credit is essential to accessing competitive loan terms.

This can be a con based on your credit history, but personal circumstances do not affect our ranking.

Ranking 15/15 as the minimum FICO score required for the loan is 650.  Note that we gave this more weight in the rankings as the ability to obtain the loan at a lower interest rate is very important to most borrowers.

College Ave also has a Parent Student Loan option where the person taking out the loan, often a parent, leaves the student out of the process altogether. This is an option for parents to support their child’s education by taking on the financial responsibility themselves. This can protect the student’s financial future while potentially securing better loan terms through the parent’s established credit history. Parent Student Loan payments happen immediately after taking out the loan which can also save on interest payments.

What is the application process?

College Ave boasts a 3-minute application process. Be prepared by having the following information ready:  contact information, SSN, estimated annual income, school name, expected graduation date, and the amount you’d like to borrow.  Fill out the application online and an instant credit decision is offered. 

During the process, College Ave will use a “soft pull” to get a snapshot of your credit history and evaluate whether you are creditworthy.  A soft pull does not affect your credit score, so you can shop around and apply for loans from multiple lenders.

Students do have to apply each year, but once you are approved, there is a 95% chance you will qualify again.  Of course that depends on changes in your personal situation. 

If you are wondering when to apply, the answer is as soon as you have details from your school and have determined how large a loan you will need.  You want to leave a window of at least 30 days before your school requests funds.

Ranking 10/10 based on the Soft Pull of your credit report.

How competitive are the rates?

College Ave rates include an auto-pay discount (0.25%), which means that you must set up direct payment from your bank account.  If you miss a payment, you will lose this benefit.

Loans can be set up with fixed or variable rates.  While variable rates can seem attractive when setting up the loan, the interest rate can fluctuate over time, potentially increasing the total cost of the loan.

At the time of this article, rates on the website show:

Fixed Rate Loans range from 4.22% – 17.99% APR

Variable Rate Loans range from 5.59% – 17.99% APR

If you can lock in a fixed-rate loan with an excellent credit score, your loan will be significantly lower than starting with a variable rate and seeing it rise to the upper percentage rates.

Ranking 10/10 based on the options of both fixed and variable rates; however, depending on credit score, these rates may not be advantageous when you are ready to sign your loan.  We encourage you to shop around for the best rates. 

Based on the competitiveness of variable and fixed rates at the time of this article, College Ave was not the lowest among all the lenders we ranked. As a result, it brought their overall score down.

Are there other resources available?

The College Ave website provides resources and tools to help students and their families make informed financial decisions. It features financial calculators to estimate loan payments and the total cost of attendance, as well as guidance on managing debt through budgeting tips and repayment strategies. 

The website also provides advice on debt consolidation and includes a blog with comprehensive articles on the student loan process, college life, financial literacy, and career guidance.  This is a valuable resource in getting your questions answered. Inputting a topic into the search tool will return relevant articles. The more you know, the better decisions you can make!

Ranking 10/10 due to Special Product Features in addition to just the loan.

What else should you consider?

We investigated the rating provided by the Better Business Bureau (BBB), which gives consumers confidence in a business’s reliability and trustworthiness. The rating is based on factors like customer complaints, transparency, and adherence to BBB standards. A higher BBB rating indicates that a business resolves customer issues effectively and operates ethically. It serves as a measure of transparency and accountability, showing how well a business treats its customers and handles disputes.

An A+ rating ranked 10 out of 10 on our scale.

Ranking 10/10 based on feedback from borrowers and an overall ranking of A+.  We encourage you to look up any lender we review on their website at www.bbb.org

We also looked at other reviews for our private student loans. If the loan was reviewed on major financial sites, we considered this a plus to the visibility of the loan. While this is a small factor in whether to consider a loan, we do recommend careful research when comparing this loan to others.

Ranking 10/10 based on a stellar review from NerdWallet. In fact, College Ave was ranked Best Overall Private Student Loan for 2024 by the site.

Does College Ave offer other loans?

We focused on undergraduate private student loans in our analysis, but College Ave also offers graduate student loans for dental, MBA, health professions, law, and medical

Later, if you find yourself burdened with several student loans (federal or private loans), College Ave will work with you on consolidation options.

Summary

Here’s a summary of the pros and cons of a private student loan with College Ave:

Pros:

  • 3 Minute Application Process with Instant Approval
  • Competitive Interest Rates
  • Loan Amount up to 100% of the Cost of Attendance
  • No Fees
  • Flexible Repayment Terms
  • Cosigner Release Option
  • A+ Rating by the BBB
  • Top Rating (and Award) from NerdWallet
  • Solid Management Structure

Cons:

  • Relatively High Variable Interest Rates
  • Must Reapply Each Year
  • Likely will Need a Cosigner to Qualify
  • Must be a US Citizen or Permanent Resident to Apply
  • No Income-Driven Repayment Plans
  • Interest Accrual During In-School Deferment Periods
  • Lack of Federal Protection

Overall Ranking

Based on our set of criteria, we rank College Ave at 4.6 out of 5.

Next Steps

Navigating private student loans can be complex, as we’ve explored in this review. We strongly recommend evaluating multiple options thoroughly before reaching a decision. Visit lender websites, talk with their representatives, and prioritize key features based on your needs.

Your choice of loan will be influenced by various factors, each carrying different levels of importance to your specific situation. Taking these steps ensures you’re well-informed and positioned to select the loan that best fits your financial and educational goals.

To learn more about additional private student loans, explore our other reviews and resources.

Click Here to Apply now to College Ave Private Student Loans

About the Author

Kim Burton is a versatile content and technical writer residing in the scenic mountains of Colorado. A lifelong learner, Kim enjoys crafting insightful articles on finance, technology, marketing, nutrition, real estate, and self-care. She holds a bachelor’s degree in Marketing and is a certified nutrition coach. As a mother preparing her child for college, Kim has conducted thorough research into the student loan process, equipping herself with a wealth of knowledge to navigate this complex financial landscape. When she’s not writing, Kim enjoys hiking, creating, gardening, and hanging out with her family.