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The College Solution: A Guide for Everyone Looking for the Right School at the Right Price by Lynn O’Shaughnessy

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46. Disappearing Discounts

All else being equal, discounts which require a shorter delay until the borrower qualifies are better than those which require a longer delay.

—Mark Kantrowitz, publisher of FinAid.org

Suppose a lender offers you a student loan with a future interest rate cut of 2%. The lender promises that if you make your payments on time for 48 months, it will slash your rate by two percentage points. What a deal.

Or is it?

Lenders like to tantalize students with rate cuts to capture their business, but too many of these discounts end up being worth less than a Snickers bar.

Lending institutions originally trotted out student loan discounts to make their deals look better than the plain vanilla direct loans that come straight from ...

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