02.22.06 Sallie Mae? or Mae not?

"SLM Corporation (Student Loan Marketing Association, NYSE: SLM), commonly known as Sallie Mae, is the United state's largest paying-for-college company, managing more than $107 billion in student loans for more than 7 million borrowers. Sallie Mae was originally created in 1972 as a government sponsored enterprise (GSE) and terminated all ties to the federal government in 2004. The company remains the country's largest originator of federally insured student loans."

...another example for my "why the US is secretly a socialist country" file. Sallie Mae is where I am getting my MBA loan from, they are one of the few US institutions willing to lend me money to go to school overseas. Apparently, they hold 1/3 of all US education loans! They gave us a pretty great rate, and now, after a bunch of rigmarole, I finally have the dough. Practically speaking.



The rig(amarole), a short story by Ean Hernandez


Online Forms, Easy-Pleasey

To apply for and get approved for an MBA loan, all I had to do was fill out an online form, and have my wife fill out a similar online cosigner form. That took about 20 minutes, and worked great.


Online Forms Only Work if You're Online

Next, I had to get Oxford to fill out a couple of fields on the form. Since they haven't set up with Sallie Mae to do this online, I had to mail this to Oxford. Nothing gets to Oxford fast. Even pricey overnight stuff gets to just outside of Oxford quickly, and then seems to slow way down as it enters town. Then, paperwork likes to sit around in in-boxes, get shuffled from department to department, and finally, get the pre-longweekend brushoff. After a month of this, my form made it's way to the equally efficient offices of Sallie Mae, who seemed to take a damn long time goofing around with it as well. During this time, I got semi-weekly robot phone calls from Sallie Mae letting me know that my loan still hadn't been fulfilled. However, after about two months the paperwork had made it's way into the Sallie Mae computer systems, and I was good to go with my loan. Almost.


The Credit Check / Disbursement Issue

Try this conundrum on for size: as a well compensated software development manager with a decent credit history, I got a good rate with Sallie Mae: Prime+0%. Throw in my well compensated biotech researcher wife will equally good credit, and we got Prime -.5%! Not too shabby. However, a credit check is only good for 6 months, so you have to either take the money soon, or risk getting a worse rate when they rerun the credit check at some future date. Enter the "disbursement date" issue. I can have SM send Oxford the $$$ now, be all paid up, and not worry about getting my loan any more, BUT, if I do that, I start accruing interest now, a at rate of prime - .5%, or 7.5% - .5%, or $292 per month. I don't have to pay Oxford the full amount until Sept 1st 2006, so I could always wait to have SM send them the cash and not start accruing interest until the last possible minute... the risk there is that I won't have much wiggle room if some kind of SM problem crops up. Worse yet, if they have to rerun my credit in Sept, I will no longer be a well compensated software development manager, I will be an out of work student (aka bum) and might get a crappier rate or even have problems getting the loan at all! So, waiting until Sept is bad too. The plan: I had Oxford tell SM to do the disbursement in May, that way I get a couple of months to clean up any last minute issues that might arise. This required several calls to both Oxford and SM, but now my loan was ready to go. Almost.


Adjusting the Length of Course

As it turns out, the full time MBA program at Oxford lasts 12 - 15 months, depending on the length of your internship, 12 is typical. However, I don't know what is going to happen when I go over, so I wanted to specify 15 months, just in case. Of course, the folks at Oxford put 12 months on the form, so I was somewhat worried that I might end up being done with school from SM's point of view, but still have another 3 months to go in my internship! SM loan payments start 6 months after the graduation date listed on the application, which could be 3 months after my actual graduation. If I'm still looking for work, or on some sort of long vacation or whatever at that time, I don't want to have to cough up an extra $292 a month. So, this took some more phone calling, but the length of the program was extended to 15 months on the SM form, and now, everything should be in order. Almost.


epilogue

I actually have a letter from SM saying they are going to give me the money, it will be disbursed in May, etc. Of course, Oxford doesn't have the cash yet, but I really have no reason to assume there will be any problem at this point ...right?