Sallie Mae Helps 1.4 Million Customers Avoid Student Loan Default in 2008-2009 Academic Year, Another 400,000 Succeed by Repaying Loans in Full
2009-07-01 17:23:04 -
Despite the challenging economy and rapidly rising national unemployment, Sallie Mae and its guaranty agency partners helped a record 1.4 million customers resolve their past-due account status and avoid default on $22.8 billion of federal student loans last year.
Another 400,000 Sallie Mae customers successfully managed their student loan investments by repaying their loans in full in the year ended June 30, 2009.
Effective loan default prevention benefits students who preserve their good credit; taxpayers who save billions of dollars; and higher education institutions who retain eligibility for federal financial aid for students.
The severe and lasting impacts of loan default include damage to the customer’s credit, the prospect of wage garnishment, the seizure of income tax refunds and federal benefit payments, the loss of eligibility for additional federal student aid, the denial or loss of professional licenses, the possibility of civil litigation and the possibility of being denied other forms of consumer credit for years to come.
Mary Gilbert was one of Sallie Mae’s customers who successfully paid in full last year, making her final student loan payment in January 2009. A 2005 graduate of Mississippi’s Meridian Community College with a degree in nursing, Ms. Gilbert experienced a series of personal and financial setbacks during her repayment period, including job loss and family medical issues, and avoided default by setting up a temporary payment relief plan.
“They were wonderful. They worked with me to set up a payment arrangement so that I was able to get back on track, which is what I wanted all along,” said Ms. Gilbert about Sallie Mae’s default prevention specialists. “People don’t realize that defaulting on a student loan is something that follows you for a long time.” Today, Ms.
Gilbert is employed by a large hospital in Houston and uses her student loan repayment experience as valuable learning lesson for her three young daughters.
Beginning today, Sallie Mae has a new default prevention tool to assist federal student loan customers experiencing financial difficulty. The new income-based repayment option, or IBR, was authorized by federal law and allows eligible customers to cap their monthly bill at 15 percent of discretionary income. More information about IBR, including an eligibility worksheet and a repayment calculator are available from Sallie Mae at www.salliemae.com/ibr : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. .
Separately, Congress is considering structural changes to the federal student loan programs. The company continues to advocate for enhancements to the Administration’s proposal that would have service providers compete to provide quality service to students not only in loan servicing, but also in loan origination, and would enhance default prevention success by requiring servicers to share in the risk of loan default.
SLM Corporation (NYSE:SLM), commonly known as Sallie Mae, is the nation’s leading provider of saving- and paying-for-college programs.
Through its subsidiaries, the company manages $185 billion in education loans and has 10 million student and parent customers. Through its Upromise affiliates, the company also manages $17 billion in 529 college-savings plans, and is a major, private source of college funding contributions in America with 10 million members and more than $475 million in member rewards. 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 www.salliemae.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. .
SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
Sallie MaeMedia Contact:Martha Holler,
703-984-5178
