Sallie Mae begins to offer fixed-rate student loans

NEWARK, Del. (AP) -- Sallie Mae will offer fixed-rate, private loans for students and families for the first time to help finance the cost of college, the lender said Monday.

The new fixed interest rates, available to college undergrads and graduate students as of May 21, will range from 5.75 percent to 12.875 percent depending on the borrower's credit history and other factors.

Sallie Mae, formally known as SLM Corp., is the nation's largest student lender. In addition to originating its own private education loans, it services government-backed student loans. It lagged bank competitors such as Wells Fargo, Citizens Bank and SunTrust in introducing fixed-rate student loans.

The lender said it also will continue to offer variable-rate loans at rates ranging from 2.25 percent to 10.125 percent.

Private student loans are an option for families and students to help pay for college if scholarships and grants, federal loans and their own resources don't cover the full costs. Loans made or backed by the federal government generally carry the best terms.

Sallie Mae said families have three in-school repayment options for either the fixed- or variable-rate loans: interest-only monthly payments, $25 fixed monthly payments or no minimum monthly payments.

Published: Wed, May 9, 2012

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