Sallie Mae, the student lending giant that is being displaced by the federal government in providing direct student loans with the passage of the health care reform bill, has offered advice to students if their financial aid comes up short.

Starting in the 2010-2011 academic year, all federal student loans will be financed directly by the government, rather than through an outside bank or other financial institution. However, the interest rates that undergraduates will pay are not affected. The health care reform bill eliminates $50 billion in federal subsidies to private lenders and adds an extra $36 billion to the Pell grant program.

If financial aid comes up short, Sallie Mae recommends families explore these tips for filling the gap:

•    Apply for additional scholarships. While some scholarship deadlines have passed already, many awards have late spring or summer deadlines. Using Sallie Mae’s free online Scholarship Search, students and parents can quickly identify scholarships still available for the upcoming school year, including 25,000 scholarships worth $75 million with deadlines between now and end of summer. The scholarship search is available at

•    Earn extra money for college through Upromise by Sallie Mae. Upromise members receive cash back every time they make an eligible purchase from hundreds of participating companies or use their Upromise credit card. Upromise members have earned $525 million in member rewards since 2001. Rewards accumulate in a member’s Upromise account and can be transferred periodically into a Sallie Mae high-yield savings account or a 529 college savings plan account administered by Upromise Investments or used to pay down eligible Sallie Mae-serviced student loans. Visit for more information.

•    Use an interest-free tuition payment plan to make paying for college more manageable. Available at hundreds of college campuses, Sallie Mae administers tuition payment plans that let families spread tuition payments over a number of months instead of making a large lump-sum payment at the beginning of the semester. Visit for more information.

•    Use a pay-interest-as-you-go private education loan. Sallie Mae’s Smart Option Student Loan helps customers graduate with less student loan debt. By making the required interest payments each month, customers can keep their balances from growing higher each month and pay off faster after graduation. For example, a typical freshman borrowing a $10,000 Smart Option Student Loan would make payments of principal and interest for only seven years rather than 15 years. The customer would save approximately $9,500—or more than half the cost in finance charges—compared to other private student loan alternatives in which no payments are made until after graduation. Visit for more information.

•    Talk to the campus financial aid office if family finances have changed. Colleges can adjust their award packages when a family encounters special circumstances, such as if a parent is laid off or takes a salary cut.

•    Sallie Mae advises that families build a customized plan to pay for their degree, and offers an Education Investment Planner to help. By plugging in information from financial aid award letters, families can use the Planner to build their own plan and compare different colleges. Students can explore federal or private student loans, estimate monthly loan payments and project the starting salary needed after graduation to keep payments manageable. The Education Investment Planner is available online at

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