Which would be the preferrable lender for a Federal student loan–Wachovia or Sallie Mae?
When applying for a Federal Stafford Loan or Federal PLUS Loan, are there any benefits to using Sallie Mae vs. going through a bank (or vice versa)?
Probably not.
All participants in the federal lending program agree to make Stafford and PLUS loans with the same interest rate, same fees and same repayment schedule. You won’t find any difference in the loan features from lender to lender.
With certain exceptions, many lenders turn the actual maintenance of their student loans over to a loan servicing company. Sallie Mae is not only a lender, they are, by far, the largest loan serving company. Even if you borrow from someone other than Sallie Mae, there’s a good chance that you’ll wind up dealing with them if you have any questions, and paying them when it’s time to begin repayment.
A quick google search will inform you that Sallie Mae has many critics, but frankly, most of that has to do with the fact that they’re so large and so many people have to deal with them. Also keep in mind that many graduated students suffer sticker shock when they realize just how much they owe, and just how long it is going to take to pay it all back. They tend to take a lot of this anger out on the lender or the loan servicer – convinced that these people are “ripping them off”.
All I can tell you is that my own personal experience with Sallie Mae lasted about 13 years, and I never had any problem with them. When I needed information, they had it available. I liked being able to pay my bills and keep track of my loans online. Knock on wood, I didn’t get on their “bad” side, so I didn’t get to experience the “Wrath of Sallie Mae” – I’m sure that’s not a lot of fun, and they are known as extremely aggressive debt collectors.
So in my experience, no, it won’t matter much. Your mileage may vary!
Good luck!
P.S. I just read the previous respondent’s answer, and I do want to caution you that a lot of the borrower incentives have disappeared this year. Changes in the government’s financial aid program have cut the amount of money that the government pays the lenders for making the loans, and the cuts did away with a lot of the extra profits that the lenders were playing “Mr. Nice Guy” with. In fact, a large number of lenders pulled out of the government program, because they determined it wasn’t cost-effective to continue making government educational loans at all.
