Along with final exams, student loan consolidation (http://www.SMARTLOAN.com) will be top-of-mind for current college students and this spring's graduates. Special services offered by Sallie Mae, the nation's leading provider of education funding and the largest student loan consolidator, make consolidating student loans the less stressful of the two events.

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"With interest rates on federal student loans set to rise on July 1 for the second-straight year, the clock is ticking for borrowers to lock in today's interest rates -- the fourth-lowest in the history of the student loan program," said Patricia Scherschel, vice president of loan consolidation for Sallie Mae.

"The decision to consolidate for many is no longer 'if,' but 'when,' 'how' and 'with whom,'" continued Scherschel. "Don't pick a lender out of a phone book or buy all of the marketing hype. Above all, act quickly to get the best deal. Missing the June 30 deadline will cost you a bundle."

Sallie Mae offers guidance to help students and graduates make an informed decision.

Choose a Lender

* Don't waste your time with an ineligible lender. Borrowers who are

submitting their applications at the last minute need to make sure they

send their application to the right place the first time. Applying for

consolidation with an ineligible lender could delay the process and

inadvertently cause a borrower to miss the June 30 deadline. Borrowers

should know that --

* If their loans are held by a single lender, they should contact that

lender to request consolidation.

* If their loans are held by more than one lender, they can choose any

lender to request consolidation.

* If their loans are Direct Loans, they are eligible to consolidate

with any lender or the Direct Loan program. Private consolidation

lenders and the Direct Loan program use the same interest-rate

formula, but loans from private lenders typically offer richer

borrower benefits, such as interest rate discounts for timely

payments.

* Find a good deal. Many private sector lenders offer interest-rate

reductions for paying on time or via direct debit. Sallie Mae offers

eligible borrowers with a balance of at least $10,000 a rate discount

of 1 percentage point after they make their first 36 payments as

initially scheduled. They will continue to receive the reduction as

long as they make on-time payments. In addition, they can receive an

immediate 0.25-percentage-point reduction in the interest rate on their

Consolidation Loan after they sign up to pay via direct debit; this

benefit is available for balances of $7,500 or more.

* Don't be short-sighted. Student loan consolidation allows borrowers to

extend repayment as long as 30 years, so it is important to select a

lender that offers flexible repayment options and excellent customer

service, including online account access. Borrowers should know if

their loans will be sold, and if so, who will service them.

Be a Savvy Shopper

* Watch for false deadlines. Interest rates on Stafford and PLUS Loans

will change on July 1, not a day before. Beware of marketing materials

that use an earlier deadline for consolidation to create panic among

borrowers.

* Don't be fooled by misleading marketing hype. Borrowers who receive

direct mail solicitations or telemarketing phone calls about

consolidation have a right to know the source of those marketing

materials. While they may appear to be coming from the federal

government, most marketing messages originate from private

consolidation brokers who get paid for each loan they consolidate.

* Be cautious of the word "free." While lenders are not permitted to

charge borrowers a fee to consolidate their loans, Consolidation Loans

are not interest-free. It is important to understand all of the costs

up front.

* Dig deeper into the lender's borrower benefit program. Many lenders

offer interest-rate reductions for paying on time or via direct debit.

However, a borrower benefit, such as an interest-rate reduction, is of

no use if the borrower does not meet the balance requirement. While

lenders typically have a minimum balance requirement, some

consolidators now have capped benefit eligibility by enforcing a

maximum balance limit. In addition, many benefits require an action on

the borrower's behalf, such as making on-time payments for a certain

time period and maintaining on-time payments to keep the benefit. As

such, they are not guaranteed.

* Get accurate savings estimates. A borrower's savings with consolidation

will vary based on the interest rate and loan balance. While a lender

may use maximum balances and minimum interest rates to promote

significant savings examples, borrowers should get an estimate for

their own situation. Borrowers are welcome to do that with calculators

on http://www.SMARTLOAN.com or by calling 800/448-3533.

Save the Date to Lock the Rate

* Don't miss the June 30 deadline. Lenders must receive a borrower's

application by midnight June 30. Applications must be accurately

completed and signed.

* Apply online to save time and avoid errors. Applying online takes the

Post Office out of the equation. The fastest way to apply is by

completing and submitting an electronically signed application at

http://www.SMARTLOAN.com. Sallie Mae's online application process makes

it very easy for borrowers to complete the necessary paperwork right

now, even before they graduate. This service is available 24/7.

Borrowers may also use an online form to request concierge service;

Sallie Mae will complete the application for borrowers to review and

then sign and submit.

For more information about student loan consolidation, visit http://www.SMARTLOAN.com.

SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation's leading provider of education funding, managing nearly $127 billion in student loans for 9 million borrowers. Sallie Mae was originally created in 1972 as a government-sponsored entity (GSE) and terminated its ties to the federal government in 2004. The company remains the country's largest originator of federally insured student loans. Through its specialized subsidiaries and divisions, Sallie Mae also provides debt management services as well as business and technical products to a range of business clients, including colleges, universities and loan guarantors. More information is available at http://www.SallieMae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America. Available Topic Expert(s): For information on the listed expert(s), click appropriate link. Ms. Patricia (Pat) Scherschel http://profnet.prnewswire.com/ud_public.jsp?userid=502044

Source: prnewswire