JMCombs

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

• They often operate with tax exempt funding that allows them to offer lower rates and better discounts on student consolidation loans.
• They help keep rates low across the board by forcing the for-profit lenders to offer low rates in order to compete. This ultimately helps save borrowers money – not shareholders.
• 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.

Many borrowers still view some of the larger lending companies like Sallie Mae or Nelnet 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.

List of state-designated nonprofits