Even with a diploma in hand, recent college graduates may still face a tough job market as the newest members of the workforce. Sallie Mae, the nation’s No. 1 financial services company specializing in education, will introduce a transitional repayment plan, effective for new loans, that will offer its customers greater budget flexibility during this period.
The Graduated Repayment Period will allow new college graduates in good standing to sign up for a one-year interest-only payment period, after the six-month grace period, instead of making full principal and interest payments at that time. The feature will be available for new Smart Option Student Loan applications on April 1 for undergraduate and graduate students who attend degree-granting institutions beginning in the fall semester.
“Everybody knows that financing a college education is a serious investment of both time and resources,” said Miles Martin, director of financial aid, Hampton University in Hampton, Va. “As with any investment, you want to get good results. The flexibility of this Sallie Mae Option Loan feature will help protect your college investment when the time comes to repay your student loans.”
The feature was designed to keep the total cost of the loan low. For example, a freshman borrower who elects in-school deferment on a $10,000 loan with typical loan terms would pay $144 per month for a 10-year repayment term. With the Graduated Repayment Option, the monthly payment would be $89 the first year, then $152 the second year, until it’s paid off. The difference in the total cost is less than $400, without extending the length of the loan. For more details, view the cost comparison
“Americans with college degrees are more likely to get hired and earn bigger paychecks, but newer graduates may need a more flexible option as they settle into a first job, create a budget, and establish financial independence,” said Charlie Rocha, senior vice president, Sallie Mae. “This feature will serve our customers who need that extra time after graduation to land on their feet.”