Sallie Mae Offers Advice to Help New College Grads Get an A+ in Student Loan Repayment

(BUSINESS WIRE)--While many new college graduates have already paid their first few months’ rent on a new apartment, deposited their first few paychecks from a new job, signed up to save in a 401(k), now comes time for another step in their adult financial life: paying back their student loan. Sallie Mae, the nation’s leading saving, planning, and paying for college company advises customers on responsible student loan management habits.

“Student loans offer payment flexibility, and our goal is to help our customers not only be successful in academia but after school as well.”

“Because of the loans I was granted from Sallie Mae, I graduated magna cum laude from New York University,” says Andi Dyal, now owner of a successful Miami-based events firm, ANJE Soirees. “At first I could only afford a small amount a month, but increased my payment significantly with each pay raise, new job and other financial opportunities that came my way. I am expecting my first child this January and wanted to make sure my college debts were paid off before I started saving for her college future.”

According to the College Board, two-thirds of bachelor’s degree recipients take out an average of $20,000 in student loans. A loan balance of this amount translates into an estimated monthly student loan payment of approximately $270.

“We are here to educate our customers on all options available to make their student loan payments better fit their budgets,” says William A. Smith Jr., customer service supervisor at Sallie Mae. “Student loans offer payment flexibility, and our goal is to help our customers not only be successful in academia but after school as well.”

Experts at Sallie Mae offer customers these tips for successfully paying student loans:

* Mark your calendar. Note when your new principal and interest payment begins—usually six months after graduation for both federal and private education loans. If you have a Sallie Mae Smart Option Student Loan, the good news is that you’ve already been making monthly interest payments while in school, and as a result, you graduated with significantly lower debt than if you had let accruing interest build up while in school. Plus, you’ve already established the habit of making monthly payments. If you want to change the day of the month your payment is due, send a message from your account at SallieMae.com or call Sallie Mae at (888) 272-5543.
* Budget for success. Financial experts advise that your total monthly debt to income ratio, including payments for student loans, credit cards, car loans, and housing—whether renting or buying—should be no more than 36 to 40 percent of your monthly gross income. If needed, consider how to cut back your other expenses or reach out to your student loan servicer to discuss another payment plan.
* Choose your payment plan. New graduates often have the option of arranging regular monthly payments or minimizing payments initially as they establish their careers. Sallie Mae’s repayment calculator can help you evaluate different payment plans. For example, federal student loans offer an income-based repayment plan, which can cap student loan payments at 15 percent of discretionary income. Different loans have different options, including some with loan forgiveness programs, so it’s important to call your loan servicer to explore the best option for you.
* Sign up for automatic debit. Enroll in automatic debit to help avoid late fees and save yourself the hassle of scrambling for stamps. Even better: Sallie Mae customers may qualify for an interest rate reduction depending on their loan type and disbursement date. For example, on loans of $20,000, a .25 percentage point lower rate could save as much as $500 over 10 years. Surprisingly, less than 20 percent of Sallie Mae customers who recently began loan repayment use automatic debit—don’t be one of them who misses out on the convenience and the possible savings.
* Sign up for Upromise to help pay off faster. Sallie Mae’s Upromise rewards service may help you pay off your student loans faster. Every time you make a qualifying purchase from hundreds of participating companies you can earn a percentage back in rewards that can be used to help pay down your student loan. For example, a freshman who borrowed student loans each year and earned $100 a year in rewards throughout college and during loan repayment could have reduced his student loan balance by nearly $2,000. Visit www.SallieMae.com/upromise to learn more about how to join.
* Reach out if you’re experiencing difficulty. Sallie Mae works with its customers to avoid default by offering options to lower monthly payments or even enabling customers to take a temporary break from payments.

Sallie Mae offers loan repayment tips via Twitter @SallieMae and Facebook at facebook.com/SallieMae.

SLM Corporation (NYSE:SLM), commonly known as Sallie Mae, is the nation’s leading saving, planning and paying for education company. Sallie Mae’s saving programs, planning resources and financing options have helped more than 31 million people make the investment in higher education. The company services $202 billion in education loans and serves 10 million student and parent customers. Its affiliate Upromise Investments, Inc., manages $27 billion in 529 college savings plans, and members of Upromise by Sallie Mae have earned more than $575 million in rewards to help pay for college. Sallie Mae offers services to a range of institutional clients, including colleges and universities, student loan guarantors and state and federal agencies. More information is available at www.SallieMae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

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Sallie Mae Assists Students with Loan Repayment

(BUSINESS WIRE)--As the date approaches for thousands of new college graduates to begin repaying their student loans, Sallie Mae offers a full range of repayment plans to help customers manage their higher education bill.

New for this year is income-based repayment (IBR) which enables federal student loan customers experiencing financial challenges to cap their monthly student loan payment at 15 percent of their discretionary income. IBR may be particularly helpful to new college graduates unable to find employment at a level they expected or for those who have accumulated higher-than-average federal loan balances through their undergraduate and graduate programs.

After 25 years, customers who qualify for IBR and who have not repaid their entire loan balance may be eligible for loan forgiveness, which would discharge the remaining loan balance. To find out more information about eligibility, customers can visit www.SallieMae.com/IBR and watch a video as well as download Sallie Mae’s IBR worksheet. Customers may apply online by logging in to their Sallie Mae online account and downloading a personalized application.

The company offers several other payment plans including fixed monthly payments of principal and interest over a 10-year repayment term, graduated repayment and extended repayment, which lowers the monthly payment amount by extending the repayment term. For more information about repayment plans, visit www.SallieMae.com/repayment.

Customers may change repayment plans at any time, and they may prepay at any time without penalty. Sallie Mae’s repayment calculator, available at www.SallieMae.com/RepaymentCalculator, enables customers to compare programs, including IBR, by calculating estimated monthly payment amount, length of time to pay off, and total finance charges paid over the life of the loan. This tool helps customers select the payment option that is best for their unique circumstance.

Sallie Mae makes every effort to help customers achieve success in paying off their student loans. Heather, a resident of Bailey, Colo., was one such customer. After graduating with a master’s degree in social work from the University of Kansas, unexpected medical bills and challenges in establishing a fledgling therapy practice caused her to get behind in her student loans. Sallie Mae contacted her to assist, and by early 2009, Heather was able to pay her education loan bill in full.

Today, she is proudly immersed in her own private practice, giving support and encouragement to people when they need it the most. “Extending a helping hand to someone in need can make all the difference,” says Heather. “It was this same kind of support that I received from Sallie Mae at a time when I really needed it.”

Automatic debit helps customers stay on track with payments and maintain a healthy post-college credit history. With automatic debit, monthly student loan payments are electronically deducted from a checking or savings account, saving time and stamps.

Upromise by Sallie Mae may also help customers pay down their student loans faster. Upromise is a free service that enables members to earn rewards from eligible purchases from participating companies that can be used to pay down their eligible student loan balances.

For example, if a freshman who borrowed the maximum Stafford loans available each year for four years of college used Upromise and earned $100 a year in rewards throughout college and during loan repayment, he would have applied nearly $2,000 in rewards toward his student loan balance.* Visit www.SallieMae.com/upromise to learn more about how to join and pay down a Sallie Mae-serviced student loan faster.

SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading provider of saving, planning and paying for education programs. Through its subsidiaries, the company manages $192 billion in education loans and serves 10 million student and parent customers. Through its Upromise affiliates, the company also manages more than $21 billion in 529 college-savings plans, and is a major, private source of college funding contributions in America with 11 million members and more than $500 million in member rewards. Sallie Mae and its subsidiaries offer debt management services as well as business and technical products to a range of business clients, including higher education institutions, student loan guarantors and state and federal agencies. More information is available at www.salliemae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

* $100 per year savings amount is not typical. Individual savings will vary depending on spending habits and level of engagement in Upromise. Active members earn contributions by using the Upromise credit card and doing things such as making eligible online and offline purchases with our partners and inviting friends and family to pass on their contributions. Saving example assumes all of the following: 4 unsubsidized Stafford loans borrowed in years 1 - 4 of school totaling $19,000 ($3,500 in year 1; $4,500 in year 2; $5,500 in year 3; $5,500 in year 4) with 2 equal disbursements per year, the customer is saving in his/her Upromise account the amount listed above on an annual basis beginning with the first Stafford Loan disbursement, a fixed interest rate of 6.8%, a 45 month in-school period, a 6 month grace period, a 10 year repayment period and a Standard Repayment Account. Postponement of payments, late fees, prepayments, Upromise program changes, change in repayment schedule including extension of repayment terms or change in school term may impact actual amounts displayed. Terms and conditions apply. Visit www.SallieMae.com/upromise. Access to Upromise is not limited to Sallie Mae customers.

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Sallie Mae Launches New Income-Based Repayment Plan

(BUSINESS WIRE)--Sallie Mae, the nation’s leading saving-, planning- and paying-for-education company, today announced a new repayment plan to help eligible federal student loan customers substantially lower their monthly payments.

The new “income-based repayment” option, or IBR, which was authorized by federal law to begin on July 1, will enable federal student loan customers experiencing financial difficulty to cap their monthly bill at 15 percent of their discretionary income. IBR also allows eligible customers making qualifying payments to extend from the standard 10-year term to up to 25 years, after which any remaining balance will be forgiven.

For example, a new college graduate with an entry-level job at $31,000 and $31,000 in federal Stafford loans would pay approximately $170 less per month compared to the payment due under the standard plan.

“Sallie Mae is committed to providing students not only with the resources needed to invest in higher education, but also with the tools to help them succeed afterward,” said Albert L. Lord, CEO. “We are pleased that our value-added IBR seminars have assisted students on all types of college campuses, including Direct Lending schools. This is another example of how competition leads directly to enhanced services for students and schools.”

With today’s launch, Sallie Mae offers a new student loan repayment calculator, available at www.SallieMae.com/repaymentcalculator, to help customers assess whether they qualify for the new plan, compare it to alternatives, simulate IBR results under different income assumptions, assess the likely time to pay in full and evaluate the total cost of each option. An eligibility worksheet, an in-depth repayment options presentation and materials geared for students who are likely to qualify, as well as information on loan forgiveness for public service professions, are also available from Sallie Mae at www.SallieMae.com/ibr.

These new resources build on other outreach efforts Sallie Mae has undertaken to build awareness about IBR and assist students on customer and non-customer (Direct Lending) campuses. In January, Sallie Mae began holding workshops and in-person visits to educate financial aid professionals and their students about the program. In March, Sallie Mae identified students likely to benefit from the new repayment plan and started educating those individuals about it with targeted counseling.

“Income-based repayment is an important new tool to help our graduates stay on track to financial success,” said Tara Olsen, director of financial aid, Tufts University School of Medicine. “Sallie Mae’s repayment strategies sessions did an excellent job of translating complex details into practical tips, and as a result our graduating students have a much better understanding of their options. As we transition to a Direct Lending school this year, we are grateful that Sallie Mae has continued to provide assistance with the education of our students.”

Under federal law, student loan customers are eligible for income-based repayment if they demonstrate financial need as defined by the Department of Education based on a formula that considers the individual’s income, federal student loan balance and household size. The monthly payment is capped at 15 percent of discretionary income and is reset each year.

The IBR option provides an alternative payment schedule for individuals with high federal student loan payments relative to their income. It may be particularly helpful to new college graduates who are unable to find employment at the levels they had expected—or for those with advanced degrees, such as law school graduates or medical residents, who have accumulated higher-than-average federal loan balances through their undergraduate and graduate programs. IBR, however, may not be the best option for all eligible customers as they may end up paying more in interest charges over the life of the loan since the option extends the repayment term.

Additionally, July 1 will bring other changes to help college-bound students make the investment in higher education. The maximum Pell Grant award will rise to $5,350, an increase of $619, and more families will be eligible to claim an expanded tax credit of up to $2,500 for higher education. In addition, account owners of tax-advantaged 529 college savings plans will be able to count the purchase of a computer for a beneficiary college student as a qualified education expense in 2009.

Finally, for the second year in a row, interest rates on need-based subsidized federal Stafford undergraduate loans will decline: the interest rate for newly disbursed loans will be 5.6 percent, down from 6.0 percent last school year. In accordance with current law, undergraduates with unsubsidized Stafford loans and graduate students will continue to pay fixed interest of 6.8 percent. In addition, the origination fee the government charges for each new Stafford loan will change to 0.5 percent, down from 1 percent.

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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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