… Representatives approved legislation last week that would cut major banks and student loan giant Sallie Mae out of a large slice of the $92 billion university student loan business if passed by the Senate.  Under the bill H.R. 3221 –the Student Aid and Fiscal Responsibility Act of 2009, all new student loans would originate with the Direct Student Loan Program as of July 1, 2010. Many big banks and their supporters are lobbying hard to crush the legislation in the Senate so that it does …

Tags: Business Education Loan Sallie Mae Student loan United States House of Representatives

… has not been able to keep pace.  Because of this many students turn to private lenders such as Sallie Mae to fund their education.  But what they don’t realize is that they are not getting the same loan product that they would get if they took out a student loan directly from the government.  Here’s the difference:

Private student loans often behave similar to credit cards.  They have a higher than usual interest rate which is often variable, they also have fewer repayment …

… that junior won’t mess up your credit, take a look at the statistics:

•A recent study by Sallie Mae found the average credit card balance for college students has grown to $3,173.

•84 percent of undergraduates this year have at least one credit card, up from 76 percent in 2004.

•On average, students have 4.6 credit cards, and half of college students had four or more cards.

•The average balance has grown to $3,173, higher than any of the previous studies.

•Median debt …

… bankruptcy.

A quick overview:  Private student loans are borrowed from private lenders such as Sallie Mae or Bank of America, while public student loans are borrowed directly from the government.  The major differences between the two types of student loans are that private student loans typically come with high interest rates and few flexible repayment options, while government student loans have low interest rates, deferments, and flexible repayment plans that include income contingent …

… are any indicator of college students’ behavior with credit cards.

The article said:

“A Sallie Mae survey found the average college student graduates with $4,700 in credit card debt, which is a 62 percent increase over the 2004 figure of $2,900. It also showed that 84 percent of all college students had at least one credit card and that students had, on average, 4.6 cards.”

What the article doesn’t mention is that many of those young people default or at least become …

In the bankruptcy case of Miller v. Sallie Mae Inc. (In re Miller) a disabled debtor who owed $20,624 on Parent Plus loans for her children’s education was denied a bankruptcy discharge of her student loans because she could not prove that continuing to pay the student loan payment would cause her to fall below the minimal standard of living.

The details of the bankruptcy case:

The debtor is severely handicapped mentally and …