Policy Allows Borrowers to Lock-in Best Possible Interest Rate on Existing
Variable Rate Student Loans
RESTON, Va., May 8 /PRNewswire-FirstCall/ -- Sallie Mae, the nation's
leading saving- and paying-for-college company, today announced that once
again it will offer a "Best-Rate Promise" to customers applying for federal
student loan consolidation. The Best-Rate Promise means that if Sallie Mae
receives customers' signed student loan consolidation applications before
July 1, then the company will base the new consolidation interest rate on
the pre- July 1 statutory interest rates or the new variable interest rate
that takes effect July 1 -- whichever is better for the customer.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a )
"This service will take the guess work out of when to apply for
customers who have variable-rate Stafford and PLUS loans," said Patricia
Scherschel, vice president for loan consolidation at Sallie Mae. "Our
Best-Rate Promise service is also available to recent 2007 grads who want
to preserve their six-month grace period; if they apply before July 1, we
will base their consolidation interest rate on the lowest variable rates
available to them in 2007."
Federal Stafford and PLUS loans first disbursed before July 1, 2006
charge variable interest rates that are set by federal formula and based on
the last auction of 91-day U.S. Treasury bills in May. Interest rates on
loans disbursed after that date are fixed at 6.8 percent (Stafford) and 8.5
percent (PLUS). Federal student loan consolidation has a fixed interest
rate, based on the weighted average of the interest rates of the student
loans being consolidated, rounded up to the nearest 0.125 percent or 8.25
percent, whichever is less.
When a student opts to consolidate their student loans, the
consolidation lender pays off the student's current federal education loans
in full and creates a new loan, with a new interest rate and a longer
repayment term. In addition to simplifying record-keeping and check-writing
chores, consolidating student loans can reduce the monthly payment amount
by up to 53 percent. That is because student loan consolidation stretches
the repayment period from the standard 10 years to up to 30 years,
depending on the amount of the education debt.
In addition to Sallie Mae's Best-Rate Promise, student and parent
customers who consolidate their Stafford, PLUS and other eligible federal
education loans using a Sallie Mae Federal Consolidation Loan can reduce
their consolidation interest rate by an additional 1.25 percentage points
by making scheduled loan payments on time, and by using automatic debit to
make payments electronically.
Customers can also opt to pay back student loans through Sallie Mae's
newest borrower benefit, Upromise Loan Link, which helps students and
families save money for education expenses. When customers join Upromise
for free, they can earn rewards on everyday purchases from participating
companies and accumulate savings for college. The new Upromise Loan Link
benefit allows Upromise members to automatically transfer Upromise Rewards
savings to help pay down Sallie Mae student loans.
"If you're graduating this spring, it is critical that you assess your
loan repayment strategy to determine how you can best benefit from the
options available to you," said Scherschel. "Don't be shy about calling for
help. We can help you manage any loans going into immediate repayment. And,
if loan consolidation is a good option for you, Sallie Mae's Best-Rate
Promise removes the stress of wondering when to apply."
In addition, Sallie Mae will accommodate any customers who prefer to
have their consolidation loans processed and disbursed prior to July 1.
More information about student loan consolidation is available at
http://www.salliemae.com/consolidation. Additionally, customer service
representatives are available at 800/448-3533 from 8 a.m. to 11 p.m. EST
Monday-Friday and 8 a.m. to 5 p.m. EST on Saturday.
SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the
nation's leading provider of saving- and paying-for-college programs. The
company manages $150 billion in education loans and serves nearly 10
million student and parent customers. Through its Upromise affiliates, the
company also manages $17 billion in 529 college-savings plans, and over 7.5
million members have joined Upromise to help save for college with rewards
on purchases at nearly 70,000 places. 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 http://www.salliemae.com. SLM Corporation and its subsidiaries are
not sponsored by or agencies of the United States of America.
SOURCE Sallie Mae
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Related links:
http://www.salliemae.com
http://www.salliemae.com/consolidation
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
http://www.prnewswire.com/comp/827187.html /
CONTACT:
Beth Guerard, +1-703-984-5621,
beth.guerard@salliemae.com
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