PHOENIX, AZ -- (MARKET WIRE) -- 01/02/07 -- The Higher Education Act mandates that colleges cannot require students to fund Federal Family Education Loan Program loans through the preferred lenders suggested by their financial aid offices. Therefore, students and parents should keep in mind that it is their decision when it comes to which company funds their FFELP student loans including the subsidized and unsubsidized Stafford Student Loans and PLUS Loans.

Students who qualify for FFELP student loans will have their loans processed through two federal programs: the Direct Loan Program (DLP) or the Federal Family Education Loan Program (FFELP). The programs differ in the source of the loan funding. With the Direct Loan Program, the student loans are funded through the U.S. Department of Education in conjunction with a college and with the Federal Family Education Loan Program the student loans are funded by private lenders that participate in the FFELP program.

The interest rates on FFELP student loans are mandated by the Department of Education, so all lenders that participate in this program must charge the same rates. However, there are other ways that lenders vie for business. Many offer special benefits including discounts for electronic payments and rate reductions for on-time payment history.

NextStudent, the Phoenix-based education funding company, offers parents and students some of the most competitive loan incentives for FFELP student loans and is committed to excellent customer service. Every NextStudent customer is assigned an Education Finance Advisor to help walk them through the entire loan process. Also, NextStudent FFELP loans do not require collateral or credit checks.

The NextStudent Premier Stafford student loan incentive package includes a 2 percent upfront cash rebate, a 3 percent cash rebate on the remaining principal balance after the first 30 months of consecutive on-time payments, .375 percent interest rate reduction when the borrower elects to use auto-debit for repayment and flexible repayment options.

The NextStudent PLUS and Graduate PLUS loan incentive packages include a 3 percent cash rebate on the remaining principal balance after the first 12 months of consecutive on-time payments, a 2 percent interest rate reduction after the first 48 months of consecutive on-time payments, a .25 percent interest rate reduction when the borrower elects to use auto-debit for repayment and flexible repayment options.

When researching lenders, students and parents should carefully consider lender benefits. Lenders also compete for business by offering different types of repayment schedules including flexible repayment options, such as reduced payment or postponed repayment, while the student is in school. Hardship policies are also an important factor because certain lenders will, under certain hardship circumstances, lower monthly payments or postpone repayments.

There is no reason that parents and students should not get the best support, service and convenience. NextStudent also offers online applications, a toll-free contact number, and a professional, courteous staff to help borrowers through the loan process and over the life of the loan.

About NextStudent

NextStudent, http://www.nextstudent.com/, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation programs, and college savings plans.

The NextStudent Scholarship Search Engine, one of the nation's oldest and largest scholarship search engines, is updated daily, available free of charge, completely private -- and represents 2.4 million scholarships worth $3.4 billion.

For more information about NextStudent and its student loan programs, please visit the company's Web site at http://www.nextstudent.com/.

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Jessica Black
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