New Federal Payment Plan Limits Monthly Bill to 15 Percent of Discretionary Income
RESTON, Va., Nov. 2, 2009—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 balance 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.
For more information contact:
Erica Eriksdotter (703) 984-5628
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. Through its subsidiaries, the company manages $176 billion in education loans and serves 10 million student and parent customers. In addition, the company’s Upromise program has enabled 11 million members to earn more than $525 million in rewards to help pay for college. Its Upromise affiliates also manage more than $23 billion in 529 college-savings plans. 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.
* $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 customer 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 borrower 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.