In the last academic year, Sallie Mae, the nation’s No. 1 financial services company specializing in education, successfully helped 2.2 million customers navigate difficult financial circumstances and avoid the consequences of default on $44 billion in federal and private student loans.
One such customer is Gresha V., a single mother from Fort Meyers, Fla., who experienced a temporary gap in employment earlier this year. “Sallie Mae worked with me so that I did not have to default on my loan,” she said. “They gave me time to get caught up with my other bills.” Three months ago, Gresha paid her student loan off entirely. “My advice to anyone who may be experiencing issues in making their student loan payments is to have an open line of communication with the default prevention people. They are there to help.”
Sallie Mae offers a variety of informational resources to help families make wise borrowing decisions and identify repayment options that work for their individual situation. As a matter of practice the company also encourages in-school loan payments to help students graduate with less debt. Sallie Mae’s free financial literacy website, CollegeAnswer.com, provides a repayment calculator and information to help understand repayment options.
In total, Sallie Mae services federal and private education loans for 10.5 million customers—the vast majority of whom manage their payments successfully. For those customers who do need extra help, default prevention specialists educate them about payment options, including Income-Based Repayment (IBR), which enables federal student loan customers to cap monthly payment at 15 percent of discretionary income. For private education loans, customers who have fallen behind may qualify for reduced payments or temporary suspension in payments. Since 2009, Sallie Mae has modified $1.1 billion in private education loans with interest rate reductions or extended repayment terms.“This economy continues to pose real financial challenges. Our work with distressed borrowers focuses on preserving their good credit standing and minimizing overall loan costs,” said Jack Remondi, president and chief operating officer, Sallie Mae. “It’s so important that when customers struggle financially, they contact us to discuss one-on-one the available options to help them avoid the severe credit consequences of delinquency or default.”