Sallie Mae federal loan customers more successful in repaying loans and more likely to use income-based repayment, compared to national data

NEWARK, Del.--(BUSINESS WIRE)--

Today Sallie Mae released repayment statistics that show its federal loan customers are less likely to default and less likely to postpone payments through forbearance, compared to national statistics published by the U.S. Department of Education. In addition, federal Direct Loan customers serviced by Sallie Mae are more likely than others to access income-based repayment plans.

“The income-based repayment plan has allowed me to stay on track with my payments while carefully managing my income and budget,” said Brittany, a first generation college student from Virginia, who graduated with a master's degree in 2012 and now works as a mental health counselor. “As I continue to pursue licensure and other career goals, I hope to be able to make larger payments in the future. My advice to others is, ‘budget, budget, budget.' I use a very detailed spreadsheet to track my monthly spending, what bills have to be paid and when. This allows me to keep my spending under control and to put money back in savings for emergencies.”

According to an analysis of company data and statistics published by the Department of Education:

• Sallie Mae-serviced customers benefit from a lower default rate. Americans with federal loans serviced by Sallie Mae are 30 percent less likely to default than others. The cohort default rate for borrowers serviced by Sallie Mae was 7 percent for federal borrowers entering repayment in 2011, compared to the national rate of 10 percent.
• Sallie Mae-serviced customers enjoy a higher rate of repayment success due to the company's top default prevention performance in the Direct Loan contract. Since 2009 when the company's contract to service Direct Loans on behalf of the Department of Education began, Sallie Mae customers have experienced a default rate 22 percent better than the lowest performing servicer and 18 percent better than the next lowest performing servicer.
• Sallie Mae customers are significantly less likely to use interest-capitalizing forbearance. As of December 31, 2013, the Department of Education reported that 11.5 percent of federal student loan borrowers (not in school or grace) are postponing their payments through the use of forbearance; whereas fewer Sallie Mae-serviced borrowers, 9.4 percent, chose forbearance, an 18 percent lower rate.
• Sallie Mae-serviced customers have a substantially higher use of income-based repayment plans. As of December 31, 2013, the Department of Education reported that 7.7 percent of all Direct Loan borrowers who were in repayment, forbearance or deferment had signed up for Income-Based Repayment or Pay As You Earn. At the end of December, 9.3 percent of the Direct Loan borrowers serviced by Sallie Mae on behalf of the Department were using these income-based repayment plans, 21 percent more than the overall Direct Loan program.

Sallie Mae services federal and private education loans for more than 13 million people.

Sallie Mae SLM is the nation's No. 1 financial services company specializing in education. Whether college is a long way off or just around the corner, Sallie Mae turns education dreams into reality for American families, today serving 25 million customers. With products and services that include Upromise rewards, scholarship search and planning tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.