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The following student loan comparison sites and directories of education lenders may accept paid placement for their listings. The loans may initially be ranked according to criteria that maximize profit to the directory and not necessarily criteria that minimize cost to the borrower. Some of the least expensive loans may be excluded from such directories because the lenders may be unwilling to pay for placement.

Some of the directories rank loans by the best advertised rates or average rates, as opposed to the actual rates. These comparisons are of limited utility, since few borrowers obtain the best advertised rates. Advertised rates are not necessarily predictive of the actual rates offered to typical users, so the prospective borrower cannot rely on the information provided by the site. You still have to shop around.

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Some of the newer comparison tools promise to provide actual rates, and so may be a step in the direction of a true commoditization of private student loans. But it remains to be seen whether they will include enough lenders to give a reasonable chance of getting a highly competitive rate. Some of the lenders who offer among the lowest rates are unlikely to be willing to pay these sites for loan leads, so it is possible that these loan comparison sites will exclude some of the lowest cost loans.

Best Student Loan Comparison Sites

The most useful student loan comparison sites need to satisfy the following minimal standards:

• Present consumers with actual interest rates and fees, not just the best advertised rates or average interest rates. This will ensure that consumers are making comparisons based on relevant information. There should be reasonable assurance that if the prospective borrower provided accurate information they will actually be able to receive the specified interest rate and fees from the lender.

• Include a critical mass of lenders sufficient to ensure that the borrower has a reasonable chance of obtaining a rate that is close to the best rate the borrower could find on his or her own. While 5 lenders is the bare minimum necessary for a site to launch, ideally a site should have more than 10 lenders.

• Minimize the impact on the prospective borrower's credit score. Each credit inquiry for student loans results in up to a 5-point hit to the borrower's credit score. More than three or four such inquiries are likely to shift the borrower from one credit tier to the next, increasing their costs.

• The presentation of information must be based solely on the prospective borrower's best interests. In particular, the initial sorting of results must be based on the total cost of the loan, including interest rates and fees, not paid placement or other criteria. APR and monthly payments are not an acceptable proxy for total cost, as a longer loan term can often mask a more expensive loan. While APR and monthly payments can and should be included in the information provided to consumers, they should not be the initial primary basis for comparing loans. Likewise, random sorting or alphabetical ordering does not provide borrowers with an emphasis on the loans that are best for them.

• The lender listings must provide sufficient information about the loans to permit the prospective borrower to make an informed decision.

• The sites must provide clear disclosures regarding any potential or actual biases. In particular, the comparison tools should disclose whether the lenders provide any payment for inclusion in the loan comparison tool and whether the payments influence the ranking of the loan product comparisons. Ideally all lenders should be charged the same fees to avoid the appearance of a possible bias.

• The comparison site should provide sufficient contact information for the lender, such as telephone numbers and web links, to permit the prospective borrower to apply for the loan.

• Prospective borrowers should not be charged any fees for using the comparison site.

• Loan comparison sites should recommend, in a clear and conspicuous fashion, that prospective borrowers should borrow federal first before relying on any private student loans.

To date, none of the loan comparison sites satisfy all of these standards, although all satisfy some of them.

Student Loan Comparison Sites (Live)

The following student loan comparison sites are live and list more than one lender. The student loan marketplaces built by Overture Technologies are listed first because they come closest to satisfying all of FinAid's criteria. The other student loan marketplaces are listed in alphabetical order.

Overture Technologies has built student loan marketplaces that allow borrowers and cosigners to compare private student loans from multiple lenders based on actual personalized rates and terms, not "as low as" teaser rates. Credit reports are pulled only once to minimize the impact on credit scores, and only shared with the lenders selected by the prospective borrower. The loan listings can be sorted by total cost, APR and monthly payment. Overture Technologies operates student loan marketplaces in partnership with several state nonprofit organizations. Overture Technologies also operates a student loan marketplace under its own brand for students in other states, the Overture Student Loan Marketplace. The state student loan marketplaces include:

• Alabama: Alabama Student Loan Marketplace in partnership with the Kentucky Higher Education Assistance Authority (KHEAA)
• California: California Private Loan Marketplace in partnership with the Association of Independent California Colleges and Universities (AICCU)
• Indiana/Michigan: ISM Student Loan Marketplace in partnership with the Indiana Secondary Market (ISM)
• Kentucky/Mississippi/Tennessee: KHEAA Student Loan Marketplace in partnership with the Kentucky Higher Education Assistance Authority (KHEAA)
• Maryland: Maryland Student Loan Marketplace in partnership with the Maryland Independent College and University Association (MICUA)
• New York: HESC Student Loan Marketplace in partnership with the New York Higher Education Services Corporation (HESC)
• Ohio: Ohio Private Loan Marketplace in partnership with the Association of Independent Colleges and Universities of Ohio (AICUO)
• Oregon: Oregon Private Loan Marketplace in partnership with the Oregon Independent Colleges Association (OICA)
• Pennsylvania: Pennsylvania Private Loan Marketplace in partnership with the Association of Independent Colleges and Universities of Pennsylvania (AICUP)

ElmSelect is a school-specific tool that lists the college's preferred lender list. The loan comparison information does not include repayment examples and is unstructured, without consistent information about all lenders. It also does not adequately distinguish between federal and private loans. ELMSelect is owned by ELM Resources, a not-for-profit mutual benefit company established by federal education lenders, guarantors and servicers.

Graduate Leverage offers a loan comparison tool called Insight that ranks FFELP lenders according to "effective APR", which takes into account the industry-wide or school-specific likelihood of qualifying for a loan discount. They provide comparisons for Stafford, PLUS, consolidation and private student loans. Their undergraduate site is called Collegiate Leverage. For more information, call 1-781-547-4100 (1-888-350-8488 graduate students, 1-877-552-9910 undergraduate students, 1-877-552-9904 financial aid administrators), fax 1-813-249-9039, write to Graduate Leverage, 880 Winter Street, Suite 320, Waltham, MA 02451 or send email to questions@collegiateleverage.com.

Greentree Gazette provides a student loan buying guide that provides comparisons for Stafford, PLUS, Consolidation and Private student loans. The interest rates and fees listed are the "lowest possible" taking all possible discounts into account. As such they do not reflect the actual cost experienced by most borrowers.

SimpleTuition offers loan comparison tools for Stafford, PLUS, Consolidation and Private education loans. The private student loans include both school-certified and non-school-certified loans. The results are initially in random order, but with the paid placement lenders ("Simple Tuition Partners") listed first. Prospective borrowers may have to take an action to see an expanded list of lenders or to sort the loans. Ranking by cost is based on best advertised rates, not actual rates. The expanded list of lenders appears to be limited to larger well-known lenders. Most Simple Tuition partners are listed with a logo, bold type, and an Apply button. No contact information is listed for the other lenders. For more information, call 1-617-630-1009, write to SimpleTuition Inc., 255 Washington Street, Newton, MA 02458, or send email to info@simpletuition.com.

Student Lending Analytics provides star ratings for private student loans for undergraduate students. They do not receive any compensation from lenders for the ratings or referrals.

Student Loan Network provides a list of six private student loan programs without any analytical comparison of the loan programs. The comparison chart does not list interest rates side-by-side or provide any kind of feature-by-feature comparison.

TuitionBids is a startup firm that plans on offering a common application form for federal (Stafford and PLUS) and private education loans. Up to 6 lenders will submit bids for the prospective borrower's loans. It bases initial "bids" on the prospective borrower's approximate rating of his/her own credit history, but displays only the best and worst rates. Prospective borrowers can also supply their social security number for more precise bids, where each lender will be pulling a credit report. Bids are not immediate. For more information, call 1-866-289-9566 or 1-201-301-6000, fax 1-201-301-6001, or write to TuitionBids.com, 180 Sylvan Ave, Englewood Cliffs, New Jersey, 07632.

Tuition Management Systems (TMS) BorrowSmart is a tuition payment plan. On their web site they include a school-specific loan comparison tool. The comparison tool displays monthly payments for each lender, but is a bit of an apples-to-oranges comparison since it allows each lender to specify a different loan term. TMS is owned by First Marblehead.

Comparison Chart

The following comparison chart highlights key differences among the various loan comparison tools. Loan comparison sites that are not yet live are listed at the end of the table.

Site	Comparison	Loan Types	Caveats
California Student Loan Marketplace	Actual Rates 5 lenders	Private	Lenders Pay to Participate Listings by Total Cost/APR/Monthly Payment
FinAid Lists of Education Lenders and Loan Discounts	Alphabetical Directory 300+ lenders	Stafford, PLUS, Consolidation, Private, Private Consolidation	Unpaid placement, but accepts lender advertising on site. Full information for all lenders.
Graduate Leverage	Average Rates 50+ lenders	Federal, Private	Paid placement.
Greentree Gazette	Lowest Possible Rates 25 lenders	Federal, Private	Paid placement. (CPC)
HESC Student Loan Marketplace	Actual Rates 3 lenders	Private	Lenders Pay to Participate Listings by Total Cost/APR/Monthly Payment
ISM Student Loan Marketplace	Actual Rates 4 lenders	Private	Lenders Pay to Participate Listings by Total Cost/APR/Monthly Payment
Maryland Student Loan Marketplace	Actual Rates 4 lenders	Private	Lenders Pay to Participate Listings by Total Cost/APR/Monthly Payment
Overture Student Loan Marketplace	Actual Rates 4 lenders	Private	Lenders Pay to Participate Listings by Total Cost/APR/Monthly Payment
SimpleTuition	Advertised Rates 16 lenders	Federal, Private	Preferential treatment for paid placement. No contact information or web links for unpaid placement. Unpaid placement limited to top lenders only.
Student Lending Analytics	Advertised Rates 11 lenders	Private	Unpaid placement.
Student Loan Network	Advertised Rates 6 lenders	Private	Paid placement. Basis of ranking unclear.
TuitionBids.com	Advertised Rates 6 lenders	Federal, Private	Paid placement.
The following loan comparison sites are not yet live or refer prospective borrowers to a single lender.
Site	Comparison	Loan Types	Caveats
College Advance LLC Student Loan Scout	Actual Rates	Private	Startup, not yet live Paid placement.
College Loan Market LLC	Actual Rates 7 lenders	Private	Startup, not yet live Paid placement.
eStudentLoan Inc. LoanFinder	Advertised Rates Currently just one lender (previously 12 lenders)	Federal, Private	Owned by Goal Financial. Paid placement only.

Loan Comparison Sites (Not Yet Live)

The following loan comparison sites are either not yet live or refer borrowers to a single lender.

College Advance LLC is a startup firm that plans on offering a loan comparison tool called Student Loan Scout for private student loans based on actual rates. In effect the prospective borrower will submit a single credit application which will be used to obtain actual interest rate and fee offers from lenders instead of just the advertised best rates. [According to the company web site, launch of Student Loan Scout has be put on hold due to the credit crisis.]

College Loan Market LLC is a startup firm that plans on offering a loan comparison tool for private student loans based on actual rates. In effect the prospective borrower will submit a single credit application which will be used to obtain actual interest rate and fee offers from lenders instead of just the advertised best rates.

eStudentLoan Inc. previously offered a loan comparison tool called LoanFinder that displayed matches with up to a half dozen loan programs. Comparisons were based on the best advertised rates and fees ("as low as"), not actual rates, although one can also look at worst case rates and fees ("up to") by clicking on the lender logo. They are owned by Goal Financial, an education lender. Currently, however, the site refers visitors to a single lender. For more information, send email to customerservice@estudentloan.com.