What Is Sallie Mae?

Learn more about Sallie Mae and student loans.
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Sallie Mae is one of the nation’s largest providers of student loans. The government founded Sallie Mae in 1972 to help students pay for college It began to move to a private organization in 1997 and has continued to operate in that capacity ever since. Currently if you go to the Sallie Mae website you will find loan options that you can apply for. They also offer a variety of other services related to students like credit cards and insurance.

However, Sallie Mae is different from the current Federal Direct Student Loan program.

Why Are Student Loans Often Referred to as Sallie Mae? 

Because the government originally ran the agency, many people refer to Sallie Mae in general when speaking about student loans. You may also have people refer to paying off Sallie Mae, and they mean paying off their student loans. You can get student loans through a variety of lenders, but you should apply for Federal Direct Loans (government guaranteed loans) first. The interest rate is much lower and the terms and conditions of the loans are easier to meet. A private student loan company is less likely to work with you if you have a difficult time making your monthly payments while the federal student loans have forgiveness programs and the option to put the loan on deferment if needed. 

How Should I Plan to Pay for College? 

When you are planning out how you are going to pay for college, you have a number of options available to you.

You should begin by choosing an affordable college. Then you need to apply for as many scholarships and grants as possible. You may also want to consider working while you are in college to help reduce the amount that you need to borrow to pay for student loans. You should apply for a Pell grant and federal student loans to help you meet your financial needs.

Private student loans should be the last resort when it comes to paying for college. You can also save on college costs by choosing to go to a public university and staying in state. Looking for an affordable college can help you avoid borrowing too much money for school. 

When Should I Use Sallie Mae? 

However, private student loans can be helpful, especially if you are going to graduate school, and you know that you will make enough money to pay them back fairly quickly. It is important to have a strict college budget and work to really limit the amount that you spend so that you do not graduate with large amounts of debt. It can be difficult to manage your finances if you have a large amount of student debt hanging over you. Private student loans should be a last option, and you should be sure that you will have the ability to repay them once you graduate. 

Be Careful With How Much You Borrow

It is important to be careful about the amount that you borrow, and to make sure you are careful with your money while in college. The way you handle it then will affect you into your future. It can take more than ten years to pay off your student loans, which is money that you can put somewhere else.

Making wise financial choices in college will make a difference in your financial future. In addition to looking for lower tuition costs, you should work on reducing the amount you spend on your living expenses too. 

Make Paying Off Your Student Loans a Priority

Once you do graduate, you need to create a plan that will allow you to get out of debt and pay off your student loans. Your private student loans should be at the beginning of your debt snowball, since the interest rate will be higher than your federal student loans. It is important to realize that bankruptcy rarely clears up student loan debt, and that you will need to pay off anything that you borrow. Additionally, private loan companies are not as likely to work with you if you run into financial issues and have a hard time making your monthly payments, while the federal student loans have several programs that can help you out during difficult times.

This makes paying off your private student loans a priority.