Repayment Calculator, Online Tools Enable Student Loan Customers to Explore Options, Make Informed Repayment Choices

Sallie Mae, the nation’s leading saving-, planning- and paying-for-education company, today announced a new repayment plan to help eligible federal student loan customers substantially lower their monthly payments.

The new “income-based repayment” option, or IBR, which was authorized by federal law to begin on July 1, will enable federal student loan customers experiencing financial difficulty to cap their monthly bill at 15 percent of their discretionary income. IBR also allows eligible customers making qualifying payments to extend from the standard 10-year term to up to 25 years, after which any remaining balance will be forgiven.

For example, a new college graduate with an entry-level job at $31,000 and $31,000 in federal Stafford loans would pay approximately $170 less per month compared to the payment due under the standard plan.

“Sallie Mae is committed to providing students not only with the resources needed to invest in higher education, but also with the tools to help them succeed afterward,” said Albert L. Lord, CEO. “We are pleased that our value-added IBR seminars have assisted students on all types of college campuses, including Direct Lending schools. This is another example of how competition leads directly to enhanced services for students and schools.”

With today’s launch, Sallie Mae offers a new student loan repayment calculator, available at www.SallieMae.com/repaymentcalculator, to help customers assess whether they qualify for the new plan, compare it to alternatives, simulate IBR results under different income assumptions, assess the likely time to pay in full and evaluate the total cost of each option. An eligibility worksheet, an in-depth repayment options presentation and materials geared for students who are likely to qualify, as well as information on loan forgiveness for public service professions, are also available from Sallie Mae at www.SallieMae.com/ibr.

These new resources build on other outreach efforts Sallie Mae has undertaken to build awareness about IBR and assist students on customer and non-customer (Direct Lending) campuses. In January, Sallie Mae began holding workshops and in-person visits to educate financial aid professionals and their students about the program.