Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Feb 9, 2021

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

The academic year of 2012-13 is bringing with it a new avenue of college financing. This week Sallie Mae announced that it will be offering fixed-rate private student loans.

The new fixed-rate options are going to be available to both undergraduate and graduate students at degree-granting institutions on May 21, 2012. The interest rates will start at 5.75 percent and they will come with no origination fees.

Private student loans typically come with variable interest rates that are re-evaluated once a year. Those variable rates can fluctuate up and down, emitting an air of uncertainty.

Fixed-rate student loans have typically been exclusive to federal college financing offers, and have been rarely originated by private lenders.

“With the addition of fixed interest rates on our private loans, Sallie Mae offers a full range of payment options to families who need to fill a gap after exploring federal financial aid,” said Joe DePaulo, executive vice president of Sallie Mae, in a release. “Whether you want the guarantee of a fixed interest rate or you’d like to benefit from today’s extremely low interest rate environment, we offer you a loan with transparency and family-friendly consumer protections.”

The introduction of these private fixed-rate student loans may not have come at a better time.

The federal student loan interest rate is currently being artificially held by legislation at 3.4 percent. But that legislation is set to expire on July 1, 2012. If Congress doesn’t grant an extension, those interest rates will double, resulting in federal college financing being offered at 6.8 percent.

While Republicans and Democrats continue to block the student loan interest rate bill with their political bickering, students and parents may find Sallie Mae and the private sector as a better and more profitable avenue for college financing.