Q: What is Sallie Mae? Who owns it?
A: SLM Corp., commonly known as Sallie Mae, manages nearly $89 billion in student loans for more than 7 million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), as well as private consumer education loans.
Q: Should applicants wait and apply for a loan only after they get admitted to B-school?
A: It's recommended that you borrow after you have been accepted by a school. Your school will need to certify your eligibility for both federal and private aid. What domestic students can do before they've been accepted to school is complete the FAFSA, or the Free Application for Federal Student Aid, which is the appropriate form for applying for federal student loans.
If you anticipate a need for private loans, you should get a copy of your credit report to fix any errors or derogatory items, such as late payments, before you apply. Clearing something up with credit bureaus can take quite a bit of time.
Q: Does the length and price of the program have any bearing on approval for a loan?
A: Not for the MBA LOANS private loan program. Borrowers can be attending school less than half-time to qualify for this loan.
Q: If a student borrows the full amount possible under the Stafford Loan, can he or she still borrow under the MBA LOANS program?
A: Yes. You can borrow up to the cost of education as determined by your school, minus federal aid.
Q: This reader asks, "If I already have a Stafford Loan from my undergrad days, can I obtain another one for my MBA?"
A: Yes, if you meet the eligibility requirements mentioned in the previous answer. You may defer the payments on your undergraduate student loans while you're in school for your MBA.
Q: This new MBA student writes: "The program I'm entering provides Stafford (subsidized and unsubsidized, up to $18,500) loans, but also Perkins loans, which are described as campus-based and variable. Can you provide more details on the Perkins program?"
A: A federal Perkins Loan is a low-interest (5%), fixed-rate loan for both undergraduate and graduate students with a financial need. Your school is the lender, so you repay this loan to your school, not to the (U.S.) government.
Q: What is the current interest rate on an MBA LOAN through Sallie Mae?
A: MBA LOANS private loan borrowers with excellent credit would receive an interest rate of prime, minus 0.50%. Today, that would be 3.5%. Borrowers with good credit receive an interest rate of prime, plus 1%. Borrowers with fair credit would receive prime, plus 3%. Currently, these rates are variable quarterly. For full annual percentage rate examples, visit Sallie Mae's Web site and click on APR examples.
Q: Can lenders check the bank balances of loan applicants?
A: Sallie Mae doesn't check bank balances. Remember that when you sign a promissory note for an education loan you are certifying that the information provided is true and complete to the best of your knowledge.
Q: How long does the Stafford and Sallie Mae application process take to complete?
A: Online applicants can be credit-approved for a loan within minutes, and if applicants electronically sign their applications they don't need to send in a paper application. However, there may still be additional items that need to be sent in to process the loan, such as school certification, proof of citizenship (if you aren't a U.S. citizen), and co-borrower information (if applicable) prior to disbursing the funds to the school.