Sallie Mae Counsels Students to Call Their Lender to Discuss Student Loan
Consolidation; Encourages Parents to Explore Student Loan Consolidation
Before July 1
RESTON, Va., May 29 /PRNewswire-FirstCall/ -- Sallie Mae, the nation's
leading saving- and paying-for-college company, today announced that
interest rates on existing variable-rate student loans will climb eight
basis points, or .08 percentage points this summer. While interest rates on
new Federal Stafford and PLUS loans are fixed under federal law, students,
graduates and parents who have older, variable-rate student loans can take
advantage of the lower rate if they apply for student loan consolidation by
June 30.
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Most 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).
"Spring 2007 college graduates who still have variable-rate loans may
wish to consider applying to consolidate before their six-month,
post-graduation grace period comes to an end," said Patricia Scherschel,
vice president, Sallie Mae. "By applying in-grace, they can lock in a rate
of 6.625 percent, compared to 7.25 percent if they wait until repayment
begins this fall. Additionally, time is money for parents who will save an
eighth of a percent by consolidating their PLUS loans before July 1 instead
of after it."
When a student opts to consolidate his or her student loans, the
student loan consolidation lender pays off the student's current federal
student loans in full and creates a new loan, with a new interest rate and
a longer repayment term. 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.
For existing Federal Stafford and PLUS loans that still carry a
variable interest rate, the interest rates as of July 1, 2007 will be:
-- Stafford Loans (in school, grace and deferment periods): 6.62 percent
-- Stafford Loans (repayment): 7.22 percent
-- PLUS Loans: 8.02 percent
In addition to simplifying record-keeping and check-writing chores,
student loan consolidation can reduce the monthly payment amount by nearly
50 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.
Student and parent customers who consolidate their Stafford, PLUS and
other eligible federal student loans using a Sallie Mae Federal
Consolidation Loan can also reduce their 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. Combined, these
benefits can provide the average customer with $4,356 in savings on a
$20,000 loan.
Customers also can opt to take advantage of Upromise rewards pay back
student loans. Upromise is a free service designed to help families save
for college. Consumers simply sign up for membership at http://www.upromise.com
and begin saving when making purchases from any of the thousands of
partners participating in the Upromise program. Through Sallie Mae's newest
customer benefit, Upromise Loan Link, when Sallie Mae student loan
customers join Upromise, they can automatically transfer their Upromise
rewards to their Sallie Mae account to help pay down their student loans.
Scherschel cautions students to be savvy when shopping for a student
loan consolidation provider. "When considering whether consolidation is the
best choice for your personal financial situation, first contact your
primary lender for help in determining your options," she said. "Beware of
misleading marketing materials and get the facts before you sign on the
dotted line. And if you are a currently Direct Loan customer, consider a
private lender like Sallie Mae, which offers savings not available in the
Direct Lending program."
Sallie Mae offers Stafford, PLUS and Consolidation Loan customers the
ability to apply for a loan, review their rights and responsibilities and
submit their "signatures" electronically through Sallie Mae's Web site,
http://www.SallieMae.com . For more information, individuals can visit
http://www.SallieMae.com or speak with Sallie Mae's specialists by calling
toll free:
-- Consolidation Loans: 800/448-3533 from 8 a.m. to 11 p.m. EDT Monday-
Friday and 8 a.m. to 5 p.m. EDT on Saturday.
-- Stafford Loans: 888/2SALLIE (888/272-5543), Monday through Thursday,
8 a.m. to 8 p.m., and Friday, 8 a.m. to 5 p.m. all time zones
-- PLUS Loans: 800/891-1410, Monday through Friday, 8 a.m. to 11 p.m. EDT
News media are invited to visit http://www.SallieMae.com/News for
additional resources and information. To schedule a media interview,
contact Beth Guerard at 703/984-5621.
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
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PRN Photo Desk, photodesk@prnewswire.com
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CONTACT:
Erica Eriksdotter of Sallie Mae,
+1-703-984-5628
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