Federal Direct Subsidized Loans are generally preferable due to their fixed interest rates, income-driven repayment options, and potential for loan forgiveness. However, College Ave Student Loans may be a better option for borrowers who need higher loan amounts or want to refinance existing loans, and have good credit.
| Attribute | College Ave Student Loans | Federal Direct Subsidized Loans |
|---|---|---|
| Interest Rates (Fixed and Variable) | Fixed: 3.24% to 17.99% APR (with autopay discount), Refinance: 6.99% to 13.99%. Variable: 4.24% to 17.99% APR (with autopay discount), Refinance: 6.99% to 13.99%, capped at 25.00%. | Fixed interest rates set by Congress. For loans disbursed between July 1, 2024, and June 30, 2025, the rate is 6.53%. For loans disbursed on or after July 1, 2025, the rate is 6.39%. Interest rates are generally lower than private loans and credit cards. |
| Loan Amounts Available | $1,000 up to the total cost of attendance. Refinance: Minimum $5,000, up to $150,000 for undergraduate, or $300,000 for medical, dental, pharmacy, or veterinary loans. | Annual limits for dependent undergraduates range from $5,500 to $7,500 (maximum $3,500 to $5,500 subsidized). For independent undergraduates, the range is $9,500 to $12,500 (maximum $3,500 to $5,500 subsidized). Aggregate limits: Dependent students: $31,000 (maximum $23,000 subsidized). Independent students: $57,500 (maximum $23,000 subsidized). The loan amount may not cover the full cost of attendance. |
| Repayment Options and Flexibility | In-school: Immediate full principal and interest, interest-only, flat $25/month, or deferred. Terms: 5, 8, 10, or 15 years for undergraduate; up to 20 years for some graduate loans. Plans: Standard, graduated, potentially income-driven. | Standard, graduated, extended, and income-driven repayment (IDR) plans are available. Standard: fixed monthly payments over 10 years. Graduated: payments start lower and increase every two years, with a 10-year repayment. Extended: fixed or graduated schedules over 25 years (for those with over $30,000 in direct loans). IDR: payments adjusted based on income and family size, with potential loan forgiveness. It's possible to change repayment plans after disbursement. |
| Eligibility Requirements | U.S. citizen or permanent resident, enrolled in a degree-granting program, satisfactory academic progress, meet age of majority, credit score in the mid-600s, minimum income: $35,000 per year without a cosigner. | Must be an undergraduate student with financial need, enrolled at least half-time in a degree-seeking program, a U.S. citizen or eligible non-citizen with a valid Social Security Number, maintain satisfactory academic progress, not be in default on previous federal student loans, and complete the FAFSA. A credit score is not required. |
| Fees (Origination, Prepayment, Late) | No origination fees, no prepayment penalties. Late fee: 5% of the unpaid amount or $25 (whichever is less). Returned payment fee: $25. | Origination fee of 1.057% for loans first disbursed on or after October 1, 2020. No prepayment penalties. |
| Cosigner Options and Release Terms | Cosigners allowed. Release: U.S. citizen or permanent resident; more than half of the repayment period elapsed; 24 consecutive on-time payments; income for the previous two years is more than twice the outstanding balance; no late payments on other obligations for the past 24 months. | Cosigners are not required. |
| Deferment and Forbearance Options | Forbearance: Up to 12 months due to financial hardship, unemployment, or disability. In-school deferment available. | Deferment allows temporary postponement of payments; interest does not accrue on Direct Subsidized Loans during deferment. Forbearance allows temporarily stopping or reducing payments; interest accrues during forbearance. Conditions for deferment include being enrolled in school at least half-time, unemployment, or economic hardship. Forbearance is granted for financial difficulties, medical expenses, or changes in employment. Deferment may be granted for up to three years, while forbearance is usually granted in yearly increments. Application is required. |
| Loan Servicing Quality and Support | Servicer: University Accounting Services (UAS). Customer service: email, chat, and phone. | Loan servicers provide regular updates and help with repayment options, deferment, and forbearance. |
| Discounts and Rewards Programs | 0.25% interest rate reduction for automatic payments. Occasional promotions and sweepstakes. | Borrowers can receive a 0.25% interest rate reduction for signing up for auto debit payments. |
| Application Process and Approval Time | Online application, reportedly takes as little as 3 minutes. Instant credit decisions possible. May be able to check rates without impacting credit score (soft credit check). Credit expiration: 180 days for in-school loans, 60 days for refinance loans. | Complete the FAFSA. First-time borrowers need to complete Entrance Counseling and a Master Promissory Note at studentaid.gov. |
| Loan Consolidation Options | Student loan refinancing available to consolidate existing loans. | Consolidate multiple federal student loans into a single Direct Consolidation Loan for simplified repayment with a single monthly payment and a fixed interest rate. May lower monthly payments but can increase the total cost due to a longer repayment period. |
| Borrower Protections and Benefits | Death or disability discharge available. Payment postponement may be available if involved in a natural disaster (as determined by FEMA). | Flexible repayment plans, options to postpone payments through deferment or forbearance, loan forgiveness programs for certain jobs, and loan discharge in the event of death or total and permanent disability. |