What is TuitionU.com?
The website hopes to become the place to go for education loans. TuitionU.com directs students towards federal loans, and then provides options for additional private loans.
The service is unique because they focus on small credit unions and banks. Students who need money can search for a credit union they may be eligible to join, and apply for a student loan at that institution.
The student wins because small credit unions will compete (by offering attractive rates) for these accounts, and the credit union wins by getting a new member - possibly a fiercely loyal one.
For private loans, students must have a co-signer. If they can't get a co-signer or don't have credit, they can try for peer-to-peer loans through GreenNote.
TuitionU.com is affiliated with GreenNote.com, a peer to peer lending site focusing on student loans. Through GreenNote, students run a "pledge drive" - hitting up friends, family, and other contacts for a student loan. GreenNote handles loan documentation and operations.
Finally, TuitionU.com works with institutions to make education funding easier on students. Some schools have developed alternative tuition payment programs. Students may be able to stretch payments out over a year (or many years). Also, TuitionU.com says that some foundations may step in and make interest-free loans to students (although you shouldn't hold your breath for such generous offers).
The success of partnerships with institutions is still unknown. It's a new concept and TuitionU is still adding parters. So far, it looks like a neat idea and it's worth checking out if you need a loan.
Websites such as TuitionU.com may lose much of their business when (and if) this new student loan reform is passed in Congress. The President expects it do pass and is already telling colleges across the U.S. to be prepared for the change by summer 2010. This legislation would essentially eliminate private lending institutions from the student loan sector – whether that’s good or bad is up for debate.