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College Ave Student Loan Refinancing Review

College Ave is a middle-of-the-road student loan refinancing company. It may be a good option for some, but it comes with red flags. 3/5 Stars.

Written By: Michael P. Lux, Esq.

Last Updated:

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Historically, College Ave has been hit and miss on student loan refinancing.

At some points, College Ave has been a hit and offered some of the best rates on the market. Other times College Ave has been a miss, offering rates that lagged behind other lenders. Right now, College Ave definitely falls into the hit category.

College Ave now offers very competitive interest rates with their refinancing options, making them a good option in certain circumstances. However, there are a few red flags that borrowers should know before signing up.

College Ave Basics

Variable-rate loans with College Ave start at 6.99%, while fixed-rate loans also start at 6.99%. The highest rate offered is 13.99%. As of the most recent interest rate update, College Ave now is among the very best.

Borrowers must either refinance a minimum of $5,000 of debt, while the maximum is $150,000 (graduates of medical, dental, veterinary, or pharmacy programs have a maximum of $250,000). Like most other legitimate lenders there are no origination or prepayment fees associated with these loans.

Borrowers have between 5 and 20 years to repay the loans, and College Ave does provide a little bit more flexibility on repayment than other lenders. For example, while most other lenders let borrowers choose a 10 or 15-year repayment term, College Ave also offers a 12-year term, should it be desired.

Interest-Only Payments

One unique feature of College Ave loans is that they offer interest-only payments for the first two years.

This loan feature is a point of emphasis on their website, but we see it as a bad option for most borrowers. By making interest-only payments for two years, you will be providing a huge profit to College Ave while not touching your principal balance. If your debt-to-income ratio is good enough to get approved for the loan, it means you can probably afford to pay more than an interest-only payment.

The only exception here would be for professionals who are on a low income for the next year or two but are certain to see a substantial increase in the near future. An example would be young doctors who are on a modest salary in the short term but are highly likely to experience a dramatic increase. Even then, paying something towards the principal balance is still the preferable choice.

The Red Flags

One bit of information that does not draw a lot of attention on the College Ave website is the connection to Navient/Sallie Mae.  College Ave was started by former Sallie Mae executives, and some of their loans are serviced by Navient.  For many borrowers, one of the perks of student loan refinancing or consolidation is getting away from Sallie Mae/Navient, but College Ave may put you right back where you started.  Starting in January of 2018 CollegeAve student loans will be exclusively serviced by Nationwide Bank.  CollegeAve borrowers who refinanced before 2018 will still have Navient servicing their loans.

CollegeAve has changed loan servicers several times over the past couple years.

CollegeAve originally had their loans serviced by Navient. They briefly stopped their student loan refinancing and when they returned to the market, the loans were serviced by Nationwide Bank. In late 2018, CollegeAve again paused lending. When they returned the loans were then serviced by UAS Accounting Services. UAS doesn’t have a great reputation as a student loan servicer and the movement from servicer to servicer is troubling.

Finally, as with all private student loan refinancing companies, College Ave will convert your federal loans into a private loan. The advantage to this move is that it lowers your interest rates and can lower payments, but it comes with a lot of risks.

By getting rid of your federal loans, you are giving up perks like Income-Driven Repayment, and certain student loan forgiveness programs. Before making this step, make sure private student loan refinacing is a good idea for you. However, if you only plan on refinancing private loans, this is not a concern.

College Ave Review: The Bottom Line

With College Ave, the rates are solid, and the repayment length flexibility is better than most.

College Ave falls a little short of the best student loan refinance companies, but if you are a smart shopper out to get the best rate, it is a company worth investigating to see what rate you qualify for.

While College Ave isn’t the best lender on paper, the actual rate offered could end up beating out other lenders, which is why we suggest shopping around.

Click Here to check your rate with College Ave.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

2 thoughts on “College Ave Student Loan Refinancing Review”

  1. I see SOFI listed as a better option when I click on the link, but when I applied to SOFI, I got a rate (6.4) barely lower than my federal loan rate (6.8). I took the opportunity to email their CEO and got passed off to customer service who told me that to get a lower rate closer to what they advertised, unneeded higher income. Like double what I make, even though I make a pretty good income. I asked if refinancing a lower amount would help (since I pay several thousand on my loan a month in an effort to pay it off quicker and could wait a few months and refinance less) and was told no, it would not. They mentioned “debt to income ratio” and I expressed confusion because I hold only student loan and mortgage debt and routinely get the best interest rates when I need a loan because my debt to income ratio is considered great and I have such high credit. They then told me it had some to do with the cost of living where I live, yet I live somewhere with a low cost of living. I am not sure who SOFI actually lowers rates for. They offered to take a cosignor, but said if I died, my cosignor (my husband) would be stuck with the balance. So I withdrew my application. I was disappointed because I heard that they were the best, but apparently only if you make $120k+ a year in a town with a low cost of living and have no other debt.

  2. I was a little concerned when I saw the three-star rating, since I just started the refi process on my Navient (former Sallie Mae) private loan that was going NO WHERE!! Despite me asking them not to, they kept putting my loan in deferment. They refuse to put any additional payments directly to principal, will only apply it to the next payment, which just pays on “foreseen” interest based on the loan never ending since they kept deferring it. 6-8 years of paying it, barely put a dent! Rip-off scam! My husband was worried about the refi I started, since it is basically the same company, but I chose a fixed rate, 5 year option just to finally be rid of this money pit of a loan. The “red flags” you listed were actually pluses for me, based on my needs 🙂


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