Figuring out how to pay for both college tuition and student loans is a problem plenty of undergraduates and graduates are struggling with, especially in this difficult economy, where less and less businesses are providing employment opportunities to recent graduates. With the increase of the number of loans students are taking out to be able to afford the costs of living associated with living at college, there is an increased opportunity for students to consolidate their loans and make it easier for them financially by making only one payment per month to cover the balance of all the other loans they have taken out.

One such loan consolidation is Sallie Mae, one of the largest student loan lenders and consolidators.


Student Loan

SallieMae Student Loan


Sallie Mae‘s private loan consolidation is fee free, allowing for graduates and undergraduates to lump together all of their private loans into one lump sum, with a period of thirty years to make repayments. Interest rates are variable instead of fixed, and are mostly based on the student's or cosigner's credit history.


Sallie Mae offers flexible repayment options in the form of:

ñ  standard repayment plan: this is the cheapest option available to private loan holders, as it has the lowest total interest expense. The minimum monthly pay is fifty dollars, over a period of fifteen years.

ñ  graduated repayment plan: this plan allows for students to make payments that can be reduced or be interest only for a period of four years. However, this will increase the costs after this period of time for the remaining balance on the loan.

ñ  extended repayment plan: graduates and undergraduates with more than thirty thousand dollars in loans can extend the time period for repayment to twenty, twenty-five or even thirty years, depending on the amount of balance remaining on the private loans. However, this does increase the costs of the interest rates.


Sallie Mae has stopped the consolidation of federal loans. This leaves a lot of graduates and undergraduates with even fewer choices for loan consolidation companies to choose from, especially with the fact that consolidated federal loans have a fixed rate that is much cheaper than the variable rates of consolidated private loans.

Sallie Mae still provides consolidation for private loans, however, which provide a longer time period of payment but at higher interest rates, at a minimum of five thousand dollars in private loans and there are not penalties for early repayment.


Sallie Mae has ceased to wave origination fees for Stafford loans, making it more expensive for students to start consolidation accounts. This was one of the biggest discounts offered to students who are new to the loan and consolidation process, and with it gone, students have to suffer a further hardship of paying this origination fee if they are consolidating their federal loans.


It may be difficult for some graduates and undergraduates to find loan consolidators that deal with both private and federal loan consolidation, as most loan consolidators are no longer willing to provide services for federal loans. Sallie Mae is one of them, and elimination of these services as reduced the variety of their customers. Also with the lack of waiving the origination fee, it makes it more difficult to save money in the future to finally pay of what is owed on their loans.