According to a
from Securian Financial Group, Sallie Mae is adding a total and
permanent disability discharge on its Smart Option private student
loan. This discharge will forgive the loan if the primary borrower
becomes totally and permanently disabled. In addition, Sallie Mae will
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cancel the Smart Option private student loan if the primary borrower
Securian Financial Group was awarded a contract to administer claims
for the new discharge provisions and promises to give prompt and fair
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The new discharge provisions give students peace of mind, knowing that if a
tragedy should strike, their families and cosigners will be treated
The changes are retroactive, applying to all borrowers since the start
of the Smart Option private student loan program in early 2009. (The
changes do not apply to other private student loans, such as the
Signature student loan.)
This makes Sallie Mae the first national lender to provide such
protections on non-federal education loans. (The NYHELPs private
student loan also includes a death and disability discharge, but the
loan is restricted to New York residents attending colleges in New York.)
Less than 0.4% of outstanding federal student loan volume is subjected
to similar discharges each year.