New Loan Policy from Sallie Mae

Last week, Sallie Mae announced that it’s changing its lending rules for its signature loan for the 2009-10 academic year. Here are the pros and cons:

I always like starting out with the cons and ending with the pros so the last thing the reader remembers is positive J

Cons

-Interest payments on the loan start while you’re in school.

-It just got harder for families to get a private loan and in the tough credit market, that’s not good news.


Pros

-Value of loan payment will be cut up to 40% over its life!

-Loan payments will be 5 to 15 years instead of 15 to 30.

Why did Sallie Mae make this change? It’s a cash flow issue – they get the money back faster and don’t have to wait till the student graduates.

A higher education is an investment and loans will continue to be a part of the process.

Liam Dunfey
University Advisors