Putting it in Perspective: Sallie Mae’s Role in Higher Education
Student loan debt on the rise.
The amount of outstanding student loans in the U.S. has been on the rise for years, and it reached a record-breaking high in 2020 at $1.57 trillion. This is a four-fold increase since 2005, when student loan debt totaled just $391 billion.
Federal v. Private: What’s the difference?
The federal government is the largest provider of student loans. In fact, the federal government holds 92% of all student loan debt, meaning fewer than $1 in $10 of student loan debt is owed to private lenders. Private student loans, like those originated by Sallie Mae®, are recommended as supplemental support for students and families who have financed the bulk of their education with income and savings, scholarships and grants, and aid from the federal government.
How does Sallie Mae Help?
With Financial Planning Calculators for Students & Families
Paying for higher education should be simpler and students should be informed, understanding loan choices and how repayment works before committing to a loan. Sallie Mae’s easy-to-use online financial planning tools and resources make it clear how the choices students make today can affect their lives tomorrow.
In 2020, Sallie Mae helped 420,000 students and families finance their education, and that lending philosophy is working: 97% of Sallie Mae loans in repayment are being successfully managed, and less than 2% default annually.
With Free Scholarship Search Tools
In the 2019-20 academic year, 58% of families used scholarships to pay for college, the second biggest source of funding after student loans. Sallie Mae provides a free scholarship search tool aimed to help students and families source more free money they can put toward college. Last year, 24,000 students earned at least one scholarship using the tool, covering $67 million in college costs.
By Making Applying for the FAFSA® Easier
In the 2017-18 academic year, 83% of families filed the Free Application for Federal Student Aid (FAFSA). In the 2019-20 academic year, only 71% did. Fewer families are filing for aid, which means they may be missing out on thousands of dollars of money for higher education.
FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid
Higher Education Financing is Complicated. Here’s How Sallie Mae is Helping Students Make Sense of it All.
Millions of students enroll in college, vocational school, or certificate programs each year, eager to learn. Before enrolling, they face a lot of decisions, including where to attend and how to pay for it.
Wading through the details of higher education financing choices (and forms) can be confusing, especially for first time students. Navigating the FAFSA® (Free Application for Federal Student Aid) and comparing multiple financial aid offers from schools can leave many families scratching their heads, not fully aware how the decisions they make today may affect their lives tomorrow.
We get it. And it’s why Sallie Mae® has made a commitment to help students make sense of their financing options – whether or not they end up choosing to borrow from us. By helping students understand their options, we’re not only helping them make smart, thoughtful financial decisions, but also we’re powering them with confidence to achieve their goals.
Understanding Financing Helps Students Achieve Their Dreams
Helping students unlock the power of higher education begins with making it easier for families to understand the full range of financing options available before they apply for assistance and loans.
The philosophy we use to counsel these families is fairly simple:
- Start with money you won’t have to pay back. Loans should never be the first option to pay for college. In fact, they should be the last. Students should supplement college savings and income by maximizing scholarships, grants, and work-study. After all, the best money is what you won’t have to pay back. This is why we provide a free scholarship search tool with access to 6 million scholarships worth up to $30 billion. Last year, more than 24,000 students received a scholarship through our search tool, covering more than $67 million in college costs.
- Explore federal student loans. We encourage students to explore federal student loan options by completing the FAFSA. Too many families skip the FAFSA because of the complicated process, which means they’re potentially missing out on thousands of dollars in financial aid.
- Consider a responsible private student loan. Sometimes, after accounting for savings, scholarships, and grants, and federal financial aid, there’s still a gap. That’s where a responsible private student loan can make sense. Often secured with a cosigner, these loans go through underwriting to ensure customers will be able to manage them successfully. Our lending philosophy also encourages students and their families to evaluate all anticipated monthly loan payments and how much the student expects to earn in the future before considering a private student loan.
This approach is working. Roughly 9 in 10 of Sallie Mae loans in repayment are being paid on time, and with less than 2% of loans defaulting last year.
When our students are able to make informed decisions about financing their higher education plans, they are empowered and more likely to achieve financial independence after school. The correlation between graduating and future success is clear and unmistakable. People with a bachelor’s degree typically earn 66% more — $1 million more over their lifetime — than those with only a high school diploma.
Tools for Everyone
Earning a degree is critical to success in today’s workforce. It’s why our financial literacy products are available for free to anyone — whether they hold Sallie Mae loans or not. From planning calculators, to estimating monthly loan payments and future costs, we want smart planning and preparation to be part of every student’s higher education experience.
We’re proud of our financial products, and we’re proud of the students and families using them to achieve their dreams. Sallie Mae isn’t just financing private student loans — we’re helping create America’s future.
FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid
Three Ways Sallie Mae Helps Students Pay for College — Without Loans
Minimizing student loan debt to maximize borrowers’ long-term success
Statistics behind student loans are sobering. Today’s higher education financing system has left 44.7 million borrowers with nearly $1.6 trillion in student loan debt. On average, students took out about $28,800 each to pay for college in the 2018-2019 school year.
Going to college should not burden students or their families with loans they are not able to repay. Preventing these situations requires empowering borrowers with the information, resources, and tools needed to make smart financial decisions about higher education.
From free scholarship search tools to partnerships that yield greater access to finances and know-how, Sallie Mae® aims to help ensure students don’t pay more for higher education than necessary, and graduate from college with only the debt they can reasonably afford to repay.
Here are three ways Sallie Mae helps students and families pay for college — without loans:
Free scholarship search tool
Before applying for loans — whether federal or private — Sallie Mae recommends every student first explore scholarships and grants. In the 2019-2020 academic year, 58% of families used scholarships to pay for college, the second largest source of funding after student loans.
Sallie Mae offers a scholarship search tool to help students find free money for college. The search tool opens doors to more than 6 million scholarship options, worth up to $30 billion in funds based on majors, locations, and even unique topics like slam poetry and technology addiction. Students fill out a brief profile, and in minutes, the tool responds with matches that identify relevant scholarships, their award amounts, application requirements and deadlines.
In 2020, 24,000 students earned at least one scholarship, covering $67 million in college costs.
Financial planning resources
One of the most important, and less addressed, steps to prepare for college is making a plan for how to save and pay for it. We know that smart financial planning is key to students’ future success before, during, and after college. That’s why Sallie Mae’s mission emphasizes the value of financial literacy through its services and helps students prepare responsibly.
With this in mind, Sallie Mae offers a variety of calculators at no cost to help students and their families build their personalized college financial plan, estimate their monthly student loan payments after college, predict future college costs, understand the impact of interest on their loans, and see how much they can potentially save for the future. Importantly, these services are available to everyone — whether they have loans with Sallie Mae or not.
The Sallie Mae Fund Bridging the Dream Scholarship Program
In partnership with the Thurgood Marshall College Fund, Sallie Mae launched The Sallie Mae Fund Bridging the Dream Scholarship Program in 2021, which will provide $3 million in scholarships over the next three years to support nearly 900 minority students and others from historically underserved communities in their pursuit of higher education. The program is an evolution of an initiative launched in 2015, which provided nearly $1 million to high school and graduate students to help them access higher education.
This program aims to ensure more minority, LGBTQ+, low income, and first-generation college students are able to access higher education and complete their degrees. Minority students are less likely to finish college compared to white students (47% completion rate for white students in 4 years compared to 22% and 33% completion rate for Black and Hispanic students in 4 years, respectively).
The Sallie Mae Fund Bridging the Dream Scholarship Program is part of a $4.5 million commitment made to support educational programs that advance social justice, diversity, inclusion, and equality.
At the end of the day, financing higher education comes down to smart planning and careful preparation. Sallie Mae is committed to bridging the gap for students and their families by helping them better plan and pay for college.