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Origination Fee Drop, Loan Limit Increases Could Mean Significant Cost Savings to Borrowers
As America's college students look toward the new academic year, Sallie Mae, the nation's leading saving- and paying-for-college company, advises them about two important changes. First, thanks to legislation enacted last year, Federal student loan limits are increasing by $875 per year for freshmen and $1,000 per year for sophomores.
This change will assist students at the time when drop-outs are most common -- the first two years of school -- by keeping them from relying on more expensive financing to pay for education. The measure also increases the annual loan limit for graduate and professional students by $2,000. The total amount students' may borrow throughout school remains unchanged.
Increased loan limits are not the only benefit for college students that will take effect on July 1. Congress has also authorized the eventual elimination of the federally required origination fee students must pay to take out federal Stafford loans. The origination fee dropped last July from 3 percent to 2 percent; it will drop again to 1.5 percent this Sunday and will be phased out completely by 2010.
As part of Sallie Mae's ongoing "zero origination fee" commitment, the company will continue to pay the balance of the origination fee -- 1.5 percent of the original loan amount -- on behalf of our customers, on all unsubsidized and subsidized, graduate and undergraduate Stafford loans that are originated by Sallie Mae's lending brands -- Academic Management Services (AMS), Nellie Mae, Sallie Mae Education Trust, Southwest Student Services, Student Loan Finance Association and Student Loan Funding. In addition, we will continue to pay the 1-percent Federal Default Fee required under law on Stafford loans issued by all lending brands and guaranteed by USA Funds through June 30, 2008.
"Sallie Mae is proud to make the dream of attending college an affordable reality for families across the United States," said Martha Holler, spokesperson, Sallie Mae. "Sallie Mae's 'zero origination fee' commitment on Stafford loans puts money in students' pockets at the time they need it the most - when they are in school. This up-front benefit is made without any strings attached, and is based on the full loan amount at the time of disbursement."

  Annual loan limits:
                                   Before July 1, 2007    After July 1 2007
  Freshman (dependent/independent)    $2,625/$6,625         $3,500/$7,500
  Sophomore (dependent/independent    $3,500/$7,500         $4,500/$8,500
  Junior (dependent/independent)      $5,500/$10,500        (no change)
  Senior (dependent/independent)      $5,500/$10,500        (no change)
  Graduate/professional student*      $18,500               $20,500

  *all graduate/professional students are considered independent

  Lifetime loan limits:

  Dependent undergraduate (no change)             $23,000
  Independent undergraduate (no change)           $46,000
  Graduate/professional student (no change)*      $138,500

  * The graduate debt limit includes loans received for undergraduate study

SLM Corporation (NYSE:SLM)
For more information: http://www.salliemae.com/

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