best direct to consumer student loans

Last Updated on December 15, 2022 by Omoyeni Adeniyi

To get all the important details you need on direct to consumer student loans available, who offers direct to consumer student loans, Federal loans don’t go directly to the student. and lots more All you have to do is to please keep on reading this post from college learners. Always ensure you come back for all the latest information that you need with zero stress.

Welcome to the best direct to consumer student loan program!

Here at College Learners we understand that college is expensive and you’re looking for a way to pay for it. But we also know that you don’t want to have to rely on banks and other companies who are only interested in making money off of you. You deserve better than that.

That’s why we offer our own direct-to-consumer student loan program. We believe in treating students like people, not just dollar signs, and giving them the opportunity to get the education they need without having to go into debt forever.

With our program, you can borrow up to $10,000 per year (up to $40,000 total) without having to provide any collateral or pay interest until after graduation. After graduation, your payments will be automatically deducted from your bank account each month—no late fees!

It’s simple: apply online today!

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who offers direct to consumer student loans

Finding a Private Student Loan

There are generally two ways to find a private student loan, using information provided by your school or using information that you obtain yourself. While you can always use just one method, you should use both and compare all of the available loans. This way you can find the best price for your loan and find the best loan that meets your needs.

Information from your school

Most schools will publish information about private loans with tuition bills or with financial aid packages. These so-called “preferred lender lists” are in some disrepute because of conflicts of interest that arose in the way some schools chose lenders. Some schools accepted referral commissions from lenders in exchange for listing them in school mailings, creating a conflict of interest. This is now illegal. Despite this historical problem, you should pay special attention to any recommendation made by your school, because most schools actively shop for the best price in student loans. This is especially true if your school publishes comparative price charts for multiple lenders and/or explains how it picked the lenders it recommends. If your school has conducted a comparative shopping effort, you should take advantage of it.

Loans obtained on referral from the school usually involve lender cooperation with the school. The lender will ask the school to verify your enrollment and, in some cases, your financial need. This may limit the amount of money you can borrower to your Expected Family Contribution as computed under the FAFSA process.

Direct-to-Consumer (DTC) Marketing

If you Google “student loan,” you will get listings of thousands of websites offering private student loans. These sites include banks, student loan marketing companies and other businesses that have partnered with student loan providers to reach consumers directly. These direct-to-consumer (DTC) loans are marketed on the Internet, by direct mail, by phone and even TV. DTC loans are generally processed and paid directly to the applicants, without school involvement. Because they are produced through paid marketing efforts (as opposed to shopping by the school), they generally cost more than loans referred through a school.

When you shop for a student loan on the web you will also find sites commonly known as “aggregators.” Examples include and These “aggregator” sites list dozens of loan sources and provide you with comparative shopping tools that allow you to sort the options by price and other criteria. They can be very useful. However, you should read the fine print on these websites. Many of these aggregators accept referral fees from some of the lenders on their list and will give preferential treatment to those “sponsors” in the way they show price comparisons and other features. A good plan is to select at least two aggregators, run comparisons on their systems and print out their results to compare side-by-side. After you have found the most attractive offers, you can go directly to the websites of the student loan providers making those offers. Don’t rush into it. Never rush directly from an aggregator site to an on-line application form. 

Student Loans - Southern New Hampshire University | SNHU

best direct to consumer student loans

Direct to Consumer Loans are like the Private Education Loans discussed on another tab on this menu except lenders make these loans directly to students without contacting the Student Financial Services Office to verify how much the student is able to borrow without affecting their other financial aid.

Students are strongly encouraged to talk with the Student Financial Services Office before taking out one of these loans because they may find they are eligible for other financial aid, including additional federal loans or certified private educational loans with better repayment terms and conditions.  If this is the case, it may then be possible to reduce the amount of, or altogether eliminate the need for a Direct to Consumer Loan.

Students who choose to take out a Direct to Consumer Loan must report the amount of the loan to the Student Financial Services Office where it must be considered as a resource in combination with any other aid received. Students who have not coordinated with the Student Financial Services Office about their Direct to Consumer Loan may find that it results in a reduction in or required repayment of other aid.

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Student loans may seem simple on the surface, but borrowers may face some complexities during the financial aid lending process.

One of the biggest points of confusion among student borrowers is where the money goes after financial aid is approved. Disbursement of student loan funds is not as straightforward as receiving a check in the amount of your new loan. It involves much more than the lender simply handing over the cash to the student.

In this article, we go over what student loan disbursement is, how it works for both federal and private student loans, and some of the complications that can arise throughout the financial aid disbursement process.

direct to consumer student loans available

Do Any Student Loans Go Directly to the Student? — Yes, and Here’s How They Work

To say college is expensive is an understatement. To pay for college, most students rely on financial aid in the form of grants, scholarships, or student loans. When a student receives their money from loans, it goes straight to their school and is added to their tuition. Are there any student loans that go directly into the student’s account instead of to the school?Article continues below advertisement

There are two types of loans, federal and private. Federal loans are funded by the federal government and private loans are nonfederal and are usually funded by a private entity such as a bank, school, local agency, or credit union.

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Federal loans don’t go directly to the student.

Federal loans don’t usually go to the student. When a college student opts to receive a federal loan, once it’s ready to be dispersed, the financier through which the loan is provided works directly with the college to add the amount to the outstanding tuition bill. There are five types of federal loans: Direct Subsidized, Direct Unsubsidized, Parent PLUS, Graduate PLUS, and direct consolidation loans.

Each loan offers a different amount to students depending on their status and what year they are in school. According to, for subsidized direct loans (also called subsidized direct loans) the payout often looks like the following: for a first-year and second-year undergraduate can receive $5,500 and $6,500, respectively. Third-year and above undergraduates can receive $7,500. In this example, it’s assumed that the student is a dependent.Article continues below advertisement

Because federal loans are orchestrated between the university and the government, the student doesn’t receive the funds directly into their account. However, depending on the total costs associated with the student’s education, the outstanding amount may be less than the total amount of loans issued. In this case, the student receives a refund of the leftover financial aid, which is deposited directly into the student’s account.

student loan paperwork

Private Direct-to-consumer loans go directly to the student’s account.

Private loans work a bit differently and can go directly to the student’s account. These types of private loans are called direct-to-consumer loans. Direct-to-consumer loans are (as the name suggests) sent directly to the student applying for them. The student can use the loan for tuition and other college-related expenses.

When a student opts to take out one of these loans, they may have to take additional steps to make their university aware such as reporting it to the financial aid office. Also, private loans may have more stipulations than federal ones such as fewer deferment options and higher interest rates. The student may have to start paying the loan back before they graduate, unlike most federal loans that allow the student to graduate before they are required to start paying the loan back.

Direct-to-consumer loans are attractive to many students because of the freedom they provide to spend the money how they see fit, because of this many DTC loans are scams. Student loan scams may request things like upfront payments or fees, or even request the students’ Federal Student Aid ID or social security number. As with any financial investment, especially for school, the student should consult a financial adviser or the department of financial aid at their university.

What is Student Loan Disbursement?

Student loan disbursement is how a lender provides your loan proceeds—or the amount of the financial aid you are approved for—to the school for payment of qualified education costs. But it starts long before the loan money is handed over from one party to the next.

Student loan disbursement begins when you apply for student loans. The lender reviews your application details, either through the FAFSA or through a private lender application, and determines if you are a good fit for receiving student loan funds. 

For federal student loans, this is based on your enrollment, your dependency status, and your year in school. For private student loans, whether you’re approved during the application process relies heavily on your credit history, income, or whether a co-signer is available.

Once your application is approved, the funds are then transferred from the lender to the school, not directly to you or your bank account. This amount of money from a federal or private loan is used by the school to cover fees, including tuition, room and board, and other fees associated with enrollment.

The remaining loan amount is disbursed to the student borrower’s bank account. In many cases, the “excess” funds are used to cover living expenses, like rent, gas, and utilities.

While this is the general way student loan disbursement works, there are differences between federal and private student loans. The details below offer more insight into how student loans are disbursed if they are from federal or from private lenders.

Federal Student Loan Disbursement

Federal student loans are disbursed through the Department of Education, so there are several regulations in place to ensure a minimal amount of fraud or confusion.

The most popular federal student loans are Direct Loans, including Direct Stafford Loans and Direct PLUS Loans. When federal loans, such as Direct Subsidized or Unsubsidized Loans, are approved, the U.S. Treasury Department transfers the funds to the Department of Education. From there, the U.S. Department of Education sends the loan proceeds to the student’s university or college.

Once the school receives the money, federal student loan funds are then used to cover school-related expenses. Tuition and other fees are paid from the loan. If there is an amount left over, the student borrower receives these funds as a form of a refund. These funds are then used to pay for whatever the student needs, or paid back to the student loan servicer if not needed at all.

Once a federal student loan is disbursed, there is a 120-day timeframe where the loan can be canceled. If a student borrower cancels the loan within this period, there are no interest or fees associated with the loan.

Additionally, federal student loan disbursements come with other stipulations. For instance, first-year undergraduate students or first-time federal student loan borrowers must wait 30 days after the enrollment period begins before a disbursement is made. This rule is put in place by most colleges and universities, so check with your school to understand whether this delay applies to you.

Also, first-time borrowers must complete entrance counseling before they can receive the initial student loan disbursement. Entrance counseling is also a requirement for graduate and professional students who take out a PLUS loan for the first time. This process is completed online, but it is important that first-time borrowers go through with the brief requirement.

A man looking at student loan paperwork

Private Student Loan Disbursement

Private student loan lenders handle loan disbursements differently. Each lender may have a different way that loans are provided after the initial application and approval process is complete. Private student loans are approved based on credit history, income, and cost of attendance. Once a student is approved for a loan, the process may involve a direct transfer to the student as a direct deposit into a bank account, or a school certification.

Direct-to-student, or direct-to-consumer, private student loans are disbursed to the student, not the school. The lender does not need to certify the loan with the school, but this puts the student in charge of using the funds to pay for fees and tuition in full. The borrower is responsible for making the necessary payments to their school’s financial aid office. 

The process for a school-certified private student loan works similarly to federal student loan disbursement. The lender approves the loan and then sends the proceeds directly to the school. The school confirms the student’s enrollment status and the anticipated graduation date, and in some cases, the cost of attendance. Schools can certify the loan as it is, or request changes based on the student’s status. This process can delay when the funds are received on behalf of the student.

Once the loan is certified, funds are then sent to the school. Tuition and fees are paid, and a refund check for the remaining balance is sent to the student from the school. In most cases, private lenders let students know when funds have been paid to the school. Then, they are aware that a refund check of the remaining amount should be on its way.

Students using private student loans should check with the lender to see if they require the certification process or if they should be expecting a check to cover the expenses of their education. The process is different for each lender, so learn these details in advance.

Complications Related to Refinancing & Consolidation

Although student loan disbursement through either private lenders or the federal government is fairly straightforward, complications can arise. This is particularly true when students refinance or consolidate their student loans to change their monthly payments. 

Loan disbursements from both the federal government and private lenders can take time when completing the refinance or consolidation process. It is up to the student borrower to ensure the funds make it to the intended destination on time and in full.

If a due date is missed during the refinancing or consolidation process, students may get hit with a missed or late payment on their credit report that is difficult to rectify. Be sure to check with your lender to understand the timeframe for disbursement when refinancing your student loans.

The future of student loans is here, and it’s looking pretty great. Direct to consumer loans are a game-changer for students and graduates who need help paying off their loans. Now you can get the cash you need without having to go through a bank or other financial institution, which means faster access to money and less hassle.

Whether you’re looking for a loan to pay off your current debt, or want to invest in your education so that you can get a better job, direct to consumer loans are an excellent option. With interest rates as low as 4%, they’re also much more affordable than most other types of loans—and they don’t require any collateral!

So what are you waiting for? Get out there and find out what kinds of options are available for your education!

If you are planning to use education loans, or if you are in the process of getting student loans, use this guide to understand your responsibilities as a borrower as well as the expectations you should have for loan disbursement.

The process differs between federal and private student loans, and among various private lenders. Misunderstanding who is paying who, in what amount, and when, can create more of a headache than necessary. Know what to expect from your lender in terms of the disbursement schedule once you are approved for a new student loan to minimize the stress.

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