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.
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.
SLM Corporation and its subsidiaries are not sponsored by or agencies of
the United States of America.
Sallie Mae
Media Contact:
Martha Holler,
703-984-5178
