Sallie Mae, the nation’s largest student lender, on Tuesday introduced a plan for beginning to repay loans while in school with $25 monthly payments.
The $25 monthly option is part of the Smart Option Student Loan program that Sallie Mae, formally known as SLM Corp., introduced in March 2009. Sallie Mae said those loans are among the first of their kind that require interest payments while in school, which shortens the repayment term compared with students who pay only after leaving school.
For a typical college freshman, a $25 monthly payment while in school and a shorter repayment period after school can translate into $6,300 in interest savings over the life of the loan, Sallie Mae said. The Reston, Va.-based company said that calculation is compared with private education loans that add to the loan balance all the interest that accrues during school.