Value of a Nonprofit Student Lender

One item generally not covered in the media is the differentiation between for-profits and state designated non-profit student lenders. The key message is that non-profit student lenders, such as Student Lending Works in Ohio, Indiana Secondary Market (www.ismloans.org) and MHESAC (www.mhesac.org) in Montana, are crucial to the student loan program.

• They are unique in mission, service, quality and innovation. Their actions reflect their values.
• Many for-profit lenders have goals of generating shareholder returns, while non-profits’ goals are to give back to their states and benefit the public.
• And when it comes to benefits for the borrower, nobody offers what non-profits offer. In fact, many larger for-profit lenders use non-profits as benchmarks to determine the very “minimum” benefits they must offer.

Basically, non-profits act as ballasts for the industry because they help to keep rates lower.

Student Lending Works is the State of Ohio's designated non-profit lender. We are the only non-profit that truly offers permanent benefits. This means once you earn a benefit with Student Lending Works, you keep the benefit, even if you are late for a payment down the road.

Advantages of Nonprofit Lenders
Many borrowers still view some of the larger lending companies as government entities, and in many cases this just isn’t so. They also believe they are receiving “permanent” benefits that don’t turn out to be as permanent as they had expected. For example, some loan companies offer interest rate reductions “if you do not miss or are not late on any of your payments for the first 12 months of your loan.” While this is an attractive offer, what many lenders don’t tell you is that if you earn the benefit and you miss or are late for one payment, you can not only lose the benefit, but you may have to retroactively pay back the benefit you earned. This is just one example of what they don’t tell you, or the things in “fine print.”