My D will need a student loan to cover part of our EFC. Instead of using the more costly the Parent PLUS loan, we have approved offers from both Wells Fargo and Sallie Mae with me as a cosigner with much lower variable interest rates and no origination fee because of my very high FICO score.
On other websites, there are hundreds of awful customer service reviews for both lenders. My search on CC has only found a handful of posts indicating favorable experiences with either lender. Does anyone have any recent experience dealing with these lenders for private student loans–good or bad? Are there any other lenders we should consider?
I have a friend with an adult (out of college a few years) who has had problems with sallie mae. The kid’s first job was not high paying enough to cover the loans, as I understand it, and Sallie Mae was difficult to deal with as the kid tried to come to an alternate arrangement for payments. In their case, it costs a fee of $150 to use forbearance to postpone payments for some amount of time- 3 months at a time for them. I don’t know the details beyond lots of phone calls and information to provide, etc., and the friend telling me to stay away from SM.
If you decide to go with the private loans, make certain that you understand their rules for what happens if the student dies or becomes incapacitated. In most cases, private lenders will still expect those loans to be paid off. PLUS loans, however, can be forgiven in such situations. You and your daughter may want to hold life insurance polices on each other for at least the amount of the private loan, so that it can be paid off should the worst come to pass.
I do recall a Sallie Mae regional rep telling me they now have terms for their private loans that the balance is forgiven if the student were to pass away. It seems like they are trying to remain competitive in comparison to the PLUS loan. I can’t speak for the other major lenders though.
According to the Wells Fargo website, “In the event of the death or total and permanent disability of the student borrower, the loan can be forgiven and the cosigner won’t be responsible for repayment.” I believe Sallie Mae has a similar provision for their student loans.
I thought that Sallie Mae was called Navient now. We have a loan that is now Navient. Have not had problems per say with it but found the website to not be very transparent. It was very hard to navigate and when we finally found out what the payments would be (it was a graduated plan and the payments to up over time).
Anyways the payment schedule posted on the website was not right and showed that we would be paying thousands more than we owed at the interest rate it was at. My H called and it was reviewed and changed but I wonder what would have happened if he hadn’t checked into the loan. He spent many hours trying to figure it out because it wasn’t making sense when he plugged the loan into a spreadsheet for a budget. I don’t think many people do this.
I’m just giving our little word of caution that we had with Navient. One thing I do want to say is that these loans can be dispursed by one company and then sold to another for payment. I think that is what happened to the loan we looked into.
From what I read, I believe the company split into two new organizations. Navient provides servicing for Federal student loans and Sallie Mae originates and services private student loans.