Information on Sallie Mae Student Loans

College students often acquire Sallie Mae student loans.

Students and their parents often worry about the rising cost of higher education and the method they'll use to pay for it. For many, this leads to the decision to take out a a loan. Sallie Mae, which has been around since 1972, provides more educational loans to students than any other lender in the United States.

Function

Initially the government sponsored Sallie Mae, but in 1996 the agency came under control of the SLM Corporation. The company manages or owns the loans of 10 million student and parents.Sallie Mae allows students to easily access their Sallie Mae loans through its numerous service centers located throughout the country. Sallie Mae offers loans for students or parents of students of colleges or vocational training programs. Sallie Mae has provided financing for more than 31 million people.

Loans

Sallie Mae offers a privately insured, credit-based loan program for undergraduate and graduate students. The lender also originates student loans offered under the Federal Family Education Loan Program; in addition, Sallie Mae purchases and services the loans from other federal programs. Individuals who have several loans may take a Sallie Mae consolidation loan to simplify the payment process with a single loan, often reducing their interest rate and payment amount. The lender even finances education for students studying abroad.

Benefits

If a borrower signs up to make monthly payments through automatic debit, Sallie Mae will reduce his interest by 0.25 of a percentage point. Using the Sallie Mae Smart Option Student Loan, a borrower who makes interest-only payments while in school and pays the money back over a shorter period of time after he graduates can save up to 30 percent on the loan amount. A borrower can also take advantage of Upromise, a program that allows the borrower to get cash back on certain purchases and then apply $25 of that amount quarterly to his Sallie Mae loan balance.

Getting the Loan

To apply for a Sallie Mae student loan, a borrower needs to visit the Sallie Mae website (see Resources) and fill out an online application. The candidate must first complete an application so that the government can determine if she qualifies for aid. She'll then receive a letter explaining any grants, scholarships, or work-study programs she may qualify for; the letter will also specify what kind of loan is recommended. To apply online, a borrower will need her Social Security number and those of any cosigners; monthly income and expense information; and personal references. If the borrower has any other student loans, she'll want to have that information on hand as well.

Considerations

Sallie Mae does recommend that all students apply for a federally funded Stafford Loan first, as this loan offers a below-market interest rate. Borrowers can also choose from four lenders associated with Sallie Mae: Sallie Mae Education Trust, Academic Management Services, Nellie Mae and Student Loan Funding Resources. A customer may repay the loan at any time without a prepayment penalty. Additionally, the borrower can request to defer payment of his loan if he runs into financial difficulty.

References

• "New York Times": SLM Corporation
• Sallie Mae: About Us
• Sallie Mae: Evaluating Financial Aid Award Letters
• Upromise: How It Works
• Sallie Mae: Selecting a Lender

Resources

• Upromise
• Sallie Mae
• Sallie Mae: Get Student Loans