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Sallie Mae College Loans...
Largest Private Loan Lender

Sallie Mae college loans are private loans for college, although this lender has contracted to do loan servicing for the government.

Sallie Mae is one of the few private lenders who will lend money to a student who is not in a degree program. Of course that student will be paying up to 5% more in interest rates, along with a 5% origination fee. (There is no origination fee for a student in a degree-granting program.)

The latest Sallie Mae loans are "Smart Option Student Loans". They were originally called this because they required some type of interest repayment while in school, resulting in lower payments after graduation. But they have changed this to allow students to have the flexibility of choosing one of three repayment plans:

a completely deferred while-in-school option
a fixed $25 monthly payment while in school
a monthly loan interest-only payment while in school

(Other college loan companies like Discover, PNC, and Wells Fargo never required in-school payments.)

"Interest-only" payments are also used with some state college loans although it is usually just one option (as in the New York HELPs program). Minnesota's SELF loans are the only private state loans to require this payment.

Interest rates are variable:

Degree granting schools: LIBOR + 2.00% (2.25% APR)- LIBOR + 9.88% (9.37% APR)- (This is with the 1-month LIBOR at 0.249%.)

Non-degree granting institutions: LIBOR + 8.0% to LIBOR + 13.76%

But no matter which Sallie Mae college loans you have (SmartOption, CareerTraining, International- or the old Signature and FFELP loans) your experience as a customer will be improved if you contact their Customer Advocate Unit for your needs.

Although it might seem as though this department would be only for those problems that were not resolved through regular customer service, I was told that personnel were allowed to assist anyone who had business with Sallie Mae loans.

If you want to avoid the possibility of costly delays with a loan servicing issue, call (888) 545-4199 for an efficient way to resolve your problem.

Sallie Mae Student Loans...What Do You Think?

What do you think about the new Sallie Mae Smart Option? Does paying interest as you go make it more or less attractive to you as a borrower? Why?

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Other Opinions

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Sallie Mae's Smart Option...really shows you care. Not rated yet
I agree with the Smart Option, simply because when I graduate in four years, I want to pay back as little as possible to make me look better. Most students ...

Sallie Mae College Loans Interest Changes Not rated yet
The interest on Sallie Mae college loans changes every month, so signing up to make payments that take care of all the interest each month seems risky....

Sallie Mae Student Loans...Smart Option Not rated yet
The Smart Option Sallie Mae student loans make sense because $25 a month is not too much to pay to avoid heavier payments later on.

With a good cosigner,...

UPromise

(All links to UPromise are compensated affiliate links.)

An interesting feature of Sallie Mae's Smart Option loans, is that you can earn 2% of your loan payments each month as UPromise rewards, which will go to your loan balance.

UPromise is the free college savings program that allows you to earn money for college costs (or for college loan payments) with your regular, everyday purchases. Anyone can join this program and earn money (with your normal spending on food, gas, clothing etc.), but the 2% earnings for on-time loan payments are just for Sallie Mae student loans.

It was announced in Aug 2010 that Upromise's grocery savings operation will become 'SaveWave'. It is still owned by Sallie Mae and savings can still be applied to college costs, but they will also be allowed to apply for savings in other areas, such as traveling or retail.

Check these pages for useful information on more financial aid topics:

Government grants for college

Instant bad credit loans

College PLUS loans

Sallie Mae college loans are one option for students with tuition gaps. Like most private loan lenders, their rates are variable (but with no cap). Their recent 2% across the board rate decrease makes their interest rates competitive.