Sallie Mae’s Smart Option Student Loan provides undergraduate students with the choice of three repayment options: a deferred repayment; fixed repayment; or interest repayment, according to the Sallie Mae website.
- Photo by Alicia Keene
Sallie Mae has been a go-to for many college students when it comes to student loans. Sources like this and many other loan agencies such as Freddie Mac offer various plans to fit each student’s needs. A consultant for Sallie Mae said the deferred repayment option allows students to begin paying back their loan six months after they graduate.
“This has been a widely used option among our clients,” the consultant said. “It allows them to save while they are in school and also some during the off period after graduating.”
A fixed repayment is $25 per month while in school and the student can benefit from an average savings of 10 percent on the total undergraduate loan.
“The fixed repayment is probably the next popular go- to choice. It helps keep the cost down and most students can afford to make these payments regularly,” the consultant said. “We have these designed specifically for students, what gets them into trouble is first the outrageous cost of school now-a-days and them getting behind or forgetting payments.”
Jeffrey Hanson, a certified financial planner for Merrill Lynch, said the area where students struggle the most is budgeting. He said they need to understand what their goals are and understand what they can’t do.
Hanson said one of the most important aspects of financial planning is budgeting.
“Students need to know what the term budgeting actually means,” Hanson said. “Know what you’re spending, track it, then set goals, and you may have to make sacrifices.”
Hanson said students should know how to handle their student loans carefully and know what they are getting in to.
“It’s interesting the number of people that come into my office at Merrill Lynch and don’t even know how many loans they have or the interest rates attached,” Hanson said. “Know what you’re doing, know when you don’t, and go get help, or you can dig yourself into debt.”
Wells Fargo loan officer, Davy Teny, said he believes the student debt is increasing each year because students have to take out more loans to pay for the rising tuition costs. He said today the amount of student debt is becoming more substantial than the amount of credit card debt.
“The tuition and education spending are increasing more than the inflation rate. The average national inflation rate is 3.1 percent, or around 3.
Teny said Wells Fargo has a specific loan popular among its students called a deferred payment loan, which allows them to begin payments six months after graduation.
“Because the payments begin six months after graduation with this loan, students can work and save up until then and hopefully have most of their loans paid off,” Teny said. “What I have noticed is it takes about 10 years on average for students to pay off their loans.”
Steven Stratton a financial planner for Eagle Strategies LLC. and Dr Pepper Snapple Group, focuses on many aspects in financial planning.
“I work with people regarding business strategies, retirement planning and risk management,” Stratton said. “I like to work in several fields.”
Listed this year and last as one of the top 1 percent of wealth managers in Dallas by Texas Monthly, Stratton said he enjoys working with such a large clientele.
“It was an honor to be noticed in the magazine,” Stratton said. “Yes, it did boost my clientele, there’s so many people who need help financially.”
Stratton is also the financial adviser for many Dr. Pepper employees, and his son is an accountant.
Travis Asher, a single father of one son from Houston, said he trusts Stratton as his personal financial adviser.
“I sought advice financially while I was in college, and I feel like I was one step ahead of the game,” Asher said. “After Kaden was born, I had to learn how to budget with a new baby. I didn’t even know where to begin.”
Asher said Stratton has been very attentive and thorough in helping him to budget and set aside funds for Kaden’s future.
“I do get a monthly check from his mother to put aside for his college fund,” Asher said. “Steven has had a lot of experience and so far his methods are working for us and how I want my lifestyle to be.”
Einerson said there are things people should look for in a financial advisor.
“When looking for a financial adviser, people should look at their education and training, licenses, designation, and their record,” Einerson said. “Just know what to look for to make the best decision.”
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