Keep Your Money in Your Pocket: November is National Scholarship Month and the Ideal Time to Plan How to Pay for College

(BUSINESS WIRE)--As economic reports signal a national recession and consumers look to cut back on spending, scholarships are an ever-more important way to pay for college. Unlike other forms of financial aid, scholarships do not have to be repaid. November is National Scholarship Month and the ideal time for students to research the college scholarships that meet their needs.

Sallie Mae’s recent study on How America Pays for College, conducted by Gallup, found that 17 percent of students used scholarships to pay for college last year and that the average family covered 15 percent of the cost of college using a combination of grants and scholarships.

Scholarship awards range from a few dollars to a full tuition bill and are offered by private sources, such as The Sallie Mae Fund, in addition to federal and state governments. Students and parents can quickly identify the scholarships they may be eligible for by using Sallie Mae’s free online Scholarship Search, which includes information about more than 2.9 million scholarships worth more than $16 billion in scholarship dollars. The Scholarship Search is available at www.SallieMae.com/scholarships and through a new “widget” that allows any organization -- including high schools, colleges and other community organizations -- to easily make the free tool accessible on the organization’s own Web site. Organizations can visit www.SallieMae.com/widget and simply copy and paste the code into any page on their own Web site.

Families can see the value of scholarship contributions by using Sallie Mae’s Education Investment Planner (www.SallieMae.com/plan) to customize their own pay-for-college plan. Using the Planner, families may estimate the total cost of a college degree, build a plan to pay for college, and estimate the salary a graduate would need to keep repayment of student loans manageable. Sallie Mae’s Education Investment Planner helps families understand the total cost of college and how to pay for it without going beyond their means.

“In tough economic times like these, now is not the time to overpay for anything, particularly college,” said Martha Holler, spokeswoman, Sallie Mae. “With a little bit of extra effort, students will find that scholarships can help them keep more of their money in their own pocket.”

Scholarships are a key part of Sallie Mae’s 1-2-3 approach to paying for college: first, use free money by filling out the FAFSA to access need-based grants, research and apply for scholarships, and supplement with current income, college savings, and an interest-free monthly tuition payment plan. Second, explore federal loans, which offer fixed interest rates and flexible repayment options for students and parents. Third, consider covering any remaining unmet need with private education loans.

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Sallie Mae Offers Tips, Tools for Successful Student Loan Repayment

(BUSINESS WIRE)--Another important milestone is approaching for last spring’s college graduates – at least those who took out student loans. As the end of the six-month, post-school student loan grace period approaches, Sallie Mae offers tips and tools to help newly minted alumni begin student loan repayment and build a healthy credit history.

“I was able to pay down part of the principal balance of my loans every month, and at one point, I even increased my monthly payment,” said Sallie Mae customer, Coelise Martin Taleb, now a registered nurse. “I also want to buy a house one day and realize that good credit is the way to accomplish this goal.”

In addition to a standard repayment plan that allows federal student loan customers to make level payments of principal and interest over a 10-year repayment term, Sallie Mae offers graduated repayment, extended repayment and income-sensitive repayment options to allow consumers to customize their federal student loan payments to suit their financial situation. To help make repayment even simpler, Sallie Mae gives customers the convenience of one bill for all of their Sallie Mae-serviced loans, including their private loans, so they can make a single monthly payment.

Sallie Mae offers these 5 tips to help customers get off on the right path for student loan repayment:

Automatic debit: Set up monthly loan payments with automatic debit as an easy way to make on-time payments. Your monthly student loan payments are electronically deducted from your checking or savings account, saving you time and stamps.

Run the numbers: Sallie Mae's Loan Repayment Calculator estimates the monthly payments and total interest costs under the different repayment plans available. Before selecting a repayment plan, run the numbers and see which repayment plan gives you a monthly payment that fits into your budget.

Link your loan to Upromise: Join Upromise, then link your Sallie Mae loan account to your Upromise account and use your Upromise rewards to transfer savings automatically to help pay down your eligible Sallie Mae student loans. Upromise helps students and families save money for education expenses by earning rewards on everyday purchases from participating companies. Visit www.SallieMae.com/upromise to learn more.

Stay in touch: Immediately notify your student loan servicer(s) of any change to your name, address, telephone number, employer, or Social Security number. This will ensure that you receive all communication from your loan provider and that you are aware of your payment amount, payment due date and repayment options.

Prepay or pay extra when possible: You may prepay your loans in part or in full at any time without penalty. This will lower the overall cost of the loan. Adding a little extra to each monthly payment can help.

“I was so proud of the fact that I had paid off my student loan, I placed a copy of the ‘Congratulations’ letter from Sallie Mae on the wall of my cubicle,” said Angelique Tellis from Lafayette, La., a Sallie Mae customer who recently paid off her student loan. “For me, the key to paying off my loan faster was to add a little extra to the payment each month.”

A recent study by Sallie Mae and Gallup on “How America Pays for College” found that the median monthly payment that students with loans expected to pay once they began repayment was $200. Respondents, however, offered a wide variance of estimates, especially for similar loan values.

Sallie Mae’s new Education Investment Planner can help students and families more accurately forecast their monthly student loan payments. The free tool, available online at www.SallieMae.com/plan, enables families to estimate the total cost of a college degree, build a customized plan to pay for college, forecast monthly student loan payments, and even estimate the salary a graduate would need to keep repayment of student loans manageable.

In addition, the Education Investment Planner educates users on debt-to-income ratios and offers debt management guidance as part of Sallie Mae’s commitment to helping families understand the total cost of college and how to pay for it without going beyond their means. A general rule of thumb is that total monthly debt payments (including payments for student loans, credit cards, car, and housing, whether renting or buying) should be no more than 36% to 40% of one’s monthly gross income.

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