PHOENIX, AZ -- (MARKET WIRE) -- 03/30/07 -- NextStudent, the Phoenix-based premier education funding company, recommends that students and their families research lenders before choosing one to fund their student loans. The Higher Education Act mandates that colleges cannot require students to fund their Federal Family Education Loan Program (FFELP) loans through the preferred lenders suggested by their financial aid offices. Students and their parents have the right to look for the best deal when it comes to funding their student loans, including both the subsidized and unsubsidized Stafford and PLUS Loans.

Most colleges offer either the Federal Direct Lending Program (FDLP) or FFELP. The main difference between these two programs is who funds the student loans. The U.S. Department of Education in conjunction with the college funds loans in the Federal Direct Lending Program. However, private lenders fund the loans if a college is a FFELP school. And FFELP schools provide "Preferred Lender Lists" to students.

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. Even so, lenders that participate in the FFEL Program vie for business by offering special incentives including discounts for opting to use electronic payments and rate reductions for on-time payment history. NextStudent recommends that when choosing a lender, students and their parents carefully research the benefits offered by the lender and choose the company offering the most savings over the long term.

NextStudent offers parents and students some of the most competitive loan incentives for FFELP loans and does not require collateral or credit checks.

The NextStudent 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 when borrowers pay through auto-debit, and an interest rate reduction of .375 percent when borrowers pay through auto-debit.

NextStudent's PLUS Loan and Graduate PLUS Loan incentive packages include a 3 percent cash rebate at repayment 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, and a .25 percent interest rate reduction when borrowers use auto-debit for repayment.

Additionally, borrowers should consider a lender's repayment schedule, looking for a lender that offers flexible repayment options, such as reduced payment or postponed repayment while the student is in school. Also, under certain hardship circumstances, some lenders offer hardship policies such as lower monthly payments or repayment postponement.

Lastly, students should look for optimal customer service. NextStudent is committed to individualized service, assigning each borrower a professionally trained Education Finance Advisor who is available to answer all financial aid questions and walk students and their families through the entire financial aid process.

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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