sallie mae

sallie mae

5 Ways to Pay Off Your Student Loans Faster

Newly-minted graduates are probably on cloud nine after they finish college. That is, until they receive their very first payment voucher for their loans. I remember the day when I picked up that dreadful Sallie Mae envelop from the mail box. I immediately did the math. If I paid the requested amount every month, it would take 12 years to pay off my loan.

I had no intention of making payments for over a decade, so I devised a plan that would have them paid off in half the time.

Here are five tips that will vanish your debt in no time:

Live like you did in college: Chances are, you lived on next to nothing in college. Keep that same mentality for the next year or so. When you find that your disposable income increases, you can put that money towards your monthly payment.

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Sallie Mae Reduces Rates on Student Loans

At a time when student loan debt is steadily on the rise, it’s nice to know that Sallie Mae is giving its borrowers a break, even if it is a small one.

Sallie Mae is decreasing its rates to 9.875 percent plus LIBOR, the rate of interest that banks can charge each other when competing for loans, in hopes of generating more business. After LIBOR, the change is merely a .5 percent rate reduction. Consumer analysts say it is unlikely that the new rate will bring in more borrowers.

Sallie Mae’s private loans, which carry higher interest rates than subsidized federal loans, are considered a last resort after scholarships, grants and government-backed loans. “This private student loan company is cutting interest rates to help bridge the gap when students and their families use up all other financial aid resources,” said Sallie Mae executive Charlie Rocha.

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Wells Fargo Forgives Student Debt in Death

Wells Fargo will pardon any student loan debt where the beneficiary dies or becomes permanently disabled, according to their new student loan agreement, released on Friday.

“When a death or permanent disability occurs, their future ability to repay is compromised,” said Kirk Bare , the head of Wells Fargo Education Financial Services. “We believe it is important to be responsive to events that affect these unique customers, and their ability to obtain financial independence and repay their loan.”

Before this new agreement, the co-signer had to pay back the loan under the circumstances. The student loan forgiveness program will be an addition to both existing and future Wells Fargo student loans.

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5 Ways to Manage Your Student Debt

It’s no secret that most graduates are in debt. By the time you walk across the stage in cap in gown you have likely built up several thousands in student loans. According to the Project on Student Debt, students, on average, are $23,200 in the hole by the time they get their degree. So instead of cringing when you get your first letter from Sallie Mae, you should educate yourself. Here are some tips on how to manage your student debt:student-loans

1. Know what you owe: Go to the National Student Loan Data System at to find out how much you owe. The website will be able to keep you up to speed on all the loans you have taken out so far. You should also know the different federal student loans you have, the lenders on each of the loans and the interest rates one each of them.

2. Never default on a student loan: There’s never a good reason to default on a loan. No matter what your financial situation is, lenders have several repayment plans, including a 36-month economic hardship deferment plan. Keep in mind that once your loans become delinquent, you lose the right to deferment and have to deal with those pesky collection fees. Read the rest of this entry »

Sallie Mae Discouraged Over New Education Reform Act

Image Via Luke Sharrett/The New York Times

Image Via Luke Sharrett/The New York Times

Just this past Tuesday, President Obama signed a landmark piece of education into law.

The new education reform act overhauls the federal student loan program by expanding Pell Grants and making it easier for students to pay their outstanding student loans after graduation. The bill also increases funding support to community colleges and minority schools.

While the education reform act is great news for students, not everyone is cheering.

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Sallie Mae Wins Contract to Service Government Student Loans

sallie maeThe Department of Education chose Sallie Mae, a leader in student loan lending, along with three other companies to service the outstanding federal student loans and future loans owned by the government totaling $550 billion. By servicing these loans, Sallie Mae would take on the administrative work, like mailing statements, receiving payments and managing delinquent accounts. The five-year contract, scheduled to begin in August 2009, awarded to Sallie Mae is only for the management of these loans, not loan origination.

Sallie Mae has long been synonymous with student loans, as it is the largest student lender in the U.S. Read the rest of this entry »

Student Credit Card Debt Rises With Tuition Hikes

credit-cardIt’s a correlation no one can deny. As college tuition and fees continue to rise (up 50% in the past 10 years), so does credit card debt. As fewer families have the cash to support college students, more students are charging their tuition, books, fees and other living expenses just to get by.

According to Sallie Mae, the average undergrad has a credit card bill of $3,173, up a startling 134% from $2,169 in 2004, and the highest amount since the organization began tracking in 1998. It seems that tenure in school correlates to debt as well, with seniors owing twice as much as freshmen.

This new study from Sallie Mae uses March 2008 data; due to the state of the economy since then, they warn the actuals for 2009 could look worse. Read the rest of this entry »

Resources for Student Loans

Many people choose not to attend college not because they cannot afford the education. Many individuals believe that they do not qualify for scholarships and simply give up the dream of attending college. There are numerous misconceptions about college loans as well. College loans are an excellent way to pay for school without having to add stress while in school.

A lot of individuals think that they do not qualify for loans. The fact is that banks, companies, private entities and even the government all give out loans for educational purposes. Anything related to education is considered an expense such as tuition, books, housing, lab fees, food and many other factors. The question remains as to how and where can someone receive access to these loans?

The best option is to talk to a college or high school admissions counselor as to what specific loans are best for your personal needs. Once you have found the school you wish to attend talk to a financial or admissions counselor about the specific requirements that the school has concerning tuition and financial obligations. Although rare, some institutions allow individuals to pay for tuition on a payment plan instead of lump sum payments. If you do decide to do a payment plan then you will need a smaller loan over a longer period of time from the loan provider.

Take the time to apply for grants and scholarships. There are thousands of hidden organizations willing to give away money to eager students. Do online research to locate scholarship opportunities. Fill out the FAFSA and SAR government aid options to further augment your monetary situation. After you have applied for financial aid and received any scholarships from the college of your choice, factor in the bottom line total of how much money you are going to need to cover all costs of a college education.

Check with your local bank first before reaching out to a specific college loan provider. Banks will usually offer more reasonable interest rates than other private loan providers. Banks will have college loan options tailored to your specific degree and major. Some banks will also have access to many different types of private and sometimes government loans such as the Stafford Loan, PLUS loans, School Certified Private Loans, which are dependant upon your school’s participation in the program, and Non-Certified Private Loans. The greatest plus banks have is that your loan can be repaid in a time frame that is comfortable with your schedule. Many private loan providers want students to repay loans starting within 6 months of graduation.

Private loan companies such as Astrive Loans, eStudent Loans and American Educational Services make college loans their top priority. Each company is different but mostly offers more information than banks on the student loan process. Students can easily search and apply for thousands of loans, research financial aid options and gain quick access to money. The downside of private loan companies is the structured repayment schedule, high interest rates and the impersonal feeling of not having a private banker at your disposal.

Before making any decision research all options thoroughly and decide which loan is best for your personal situation.


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