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March 17, 2010


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You have to be kidding me right. I thought you were giving the perception of an honest, unbiased opinion. We know that if given the "choice" many people would choose not to make any payments. Just because the other loans "accept" in school payments doesn't mean anyone is taking them up on that offer. Why not ask the other private loan lenders how many are making vol payments. You're into transparency right.

Sallie Mae's program doesn't work great at my school, but it's a great option for families trying to keep strong fiscal habits in place. What other industry gives a "kid" a loan and then not talk to them for 4 or 5 years.

You just played the "I hate Sallie Mae" card Tim. You should be ashamed. We all took note and your credibility is down the drain.


Will, I don't think there is any need to be rude.

In regards to the Sallie Mae Smart Option Loan, we have a great example at our school of a father using this product to teach financial literacy and responsibility to his three college-age children. They applied for the loan with their father as a cosigner, and he sat down with them and helped them draw up a budget and payment plan for themselves that would include the monthly interest payments.

We have also had many students apply for the Smart Option loan for the interest payment option and then cancel their application when they realized that that option was available through any lender. They felt misled because Sallie Mae does not really mention that other lenders accept interest-only payments in its advertising. Instead, they give a worst-case scenario example of what happens when you borrow from a different lender.

I don't think the problem is whether people should have a choice or not about making interest payments. I think the issue is more that people need to learn more about finances and responsibility. It is unfortunate that not everyone has a father to sit them down and teach them about responsible spending. That then becomes the duty of the lender and the school - more so the school, in my opinion.

Tim Ranzetta


I appreciate your feedback. I have to admit that I am not ashamed at all about increasing consumer awareness that all lenders allow borrowers to make in-school interest payments and therefore interest rates do matter. I think this is more useful information than an apples-to-oranges comparison of finance charges over the life of the loan that makes one's own loan product look better than the competition. As for any cards that I am playing, I have to admit a bias towards finding consumers low cost loans. As for your ad hominem attacks on my credibility, if you really feel that way, it sounds like a great opportunity to stop reading my blog.


Bizzaro Watchdog

What's lacking here Tim, (if I may), is a balanced view of what Sallie Mae is doing. What other lenders are pushing their borrowers to pay interest in school? Where are they Tim? Perhaps you should do the math Tim. I bet if you did the math...you might find that the Smart Option is a sound investment for borrowers relative to the competition (which doesn't push interest-only payments while in school).

And, if you don't like the interest rate that you have on your current Sallie Mae loans, you can always refinance them when long-term rates come down...which they will. (I bet there will be plenty of people offering consolidation loans soon as a viable refinancing alternative.) Balance Tim, balance.

Class dismissed.


Not sure what "ad hominem" means sorry. Must be us simple school folks just trying to make a livin'.

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