Sallie Mae lowers cost of Stafford loans for Pennsylvania college students

Sallie Mae announces enhanced Pennsylvania rewards program.

RESTON, Va.,—Sallie Mae, the nation’s leading saving- and paying-for-college company, announced plans to enhance its Pennsylvania Rewards Program. Under the new program, Sallie Mae will offer even lower-cost Stafford loans for students attending any Pennsylvania college or university in the upcoming 2007–2008 academic year. Sallie Mae estimates that the Pennsylvania Rewards Program will save a Pennsylvania student with $19,000 in Stafford loans more than $3,500 in interest and fees.

Students who attend college in Pennsylvania and take out undergraduate and graduate Stafford loans serviced by Sallie Mae and guaranteed by any guarantor in the Commonwealth—such as USA Funds or PHEAA for the 2007–2008 academic year—are eligible for Sallie Mae’s Pennsylvania Rewards Program. Unlike benefit programs offered by other lenders where only a fraction of borrowers meet the eligibility criteria, Sallie Mae’s Pennsylvania Rewards Program places benefits up front so that more students will qualify and pay less for their education expenses.

“Sallie Mae believes in open competition in Pennsylvania’s student loan market, which results in the best price, best service and best value for students, parents and schools,” said Frank Hollister, executive vice president of Sallie Mae Pennsylvania. “These benefits mean students significantly reduce their overall cost of borrowing, pay no fees on student loans and earn real repayment benefits.”

Under the Pennsylvania Rewards Program, Sallie Mae pays the 1.5 percent loan origination fee and the 1 percent default fee on loans guaranteed by USA Funds for academic year 2007–2008. Sallie Mae borrowers with loans guaranteed by PHEAA also qualify for the 1 percent default fee benefit, paid on their behalf by PHEAA.

Sallie Mae’s Pennsylvania Rewards Program also offers both a 2 percent loan credit after Pennsylvania Stafford Loan customers make their first on-time loan payment and a 3.5 percent loan credit after the first 24 on-time payments. Pennsylvania students with Stafford loans can also lower their interest rate another 0.30 percentage points by making their loan payments through Sallie Mae’s automatic debit program.

The Pennsylvania Rewards Program, also includes the Upromise Loan Link, a benefit that enables Sallie Mae customers—in Pennsylvania and nationwide—to reduce their student loan debt on any of their Sallie Mae serviced student loans, including Stafford, PLUS, Graduate PLUS, consolidation and private loans, even while in school.

Sallie Mae customers who sign up to become Upromise members can apply accumulated Upromise rewards to their student loan accounts. Upromise’s free popular rewards service allows members to earn rewards when shopping online, buying gas or groceries, dining out, or purchasing other goods and services from more than 500 participating companies. With Loan Link, these rewards can then be automatically transferred into the customer’s Sallie Mae student loan account. When combined with the other borrower benefits offered under the Pennsylvania Rewards Program, the average Pennsylvania student could save more than 18 percent on his or her original student loan balance.

“While Sallie Mae is committed to making the dream of a higher education a reality for Pennsylvania families, by offering innovative, cost saving programs, proposals in Washington to cut the federal student loan program would make it even more difficult to offer these benefits,” Hollister continued. “These benefits save real students real money, and we are concerned that, in the long run, government proposals could make it more expensive for students here in Pennsylvania and across the country to borrow money for college.”

The Pennsylvania Rewards Program is available to students with Stafford loans first disbursed July 1, 2007 through June 30, 2008 from one of the following participating lenders or lender partners: Academic Management Services (AMS), College Board, Dollar Bank, Nellie Mae, and Sallie Mae Education Trust.

For more information contact:
Rick Castellano (703)984-5535