Washington, D.C., Jan. 29, 2003 - The Association of American Medical Colleges (AAMC) and Sallie Mae, the nation's leading provider of education funding, today announced the introduction of the MEDLOANS Consolidation Loan, a federal consolidation loan program created especially to help medical school borrowers manage their education loan debt. Provided by Sallie Mae and developed with the guidance of the AAMC, this new product allows eligible borrowers to lower their monthly student loan payments by up to 50 percent or more, lock in historically low interest rates, and potentially save thousands of dollars in interest expenses by taking advantage of special borrower benefits.

Sallie Mae and AAMC have partnered since 1986 to offer MEDLOANS, the nation's leading source of federal and private loan funding for medical school students.

The MEDLOANS Program is designed specifically to meet the needs of medical school students, residents and practicing physicians," said Paula Craw, director of student financial services at the AAMC. "We've streamlined the application process by offering an online application. Just as important, we offer consolidation counseling services geared exclusively toward assisting today's busy doctors in navigating the consolidation process."

The MEDLOANS Consolidation Loan allows borrowers to roll all eligible student loans into a new loan with one monthly payment. The new loan becomes the combined balance of the previous loans, with a weighted average interest rate of the underlying loans' interest rates, adjusted up to the nearest 0.125 percent. This new interest rate, which is locked for the life of the loan, cannot exceed 8.25 percent.

In addition, MEDLOANS Consolidation Loan borrowers are eligible to receive money-saving borrower benefits on top of today's historically low interest rates. Borrowers who elect to have their monthly payments directly debited from a checking or savings account are eligible for an immediate 0.25-percentage point interest rate reduction. Borrowers also can earn a benefit equal to 1 percent of the initial MEDLOANS Consolidation Loan balance once they have made their initial 33 scheduled payments on time, enrolled in Manage Your LoansSM and signed up to receive loan information at a valid e-mail address. This benefit is offered in the form of either cash or a loan credit. Finally, after making their first 48 payments on time, borrowers will receive a further rate discount of 1 percentage point as long as they continue to make on-time payments. Benefits are available to the non-HEAL portion of a MEDLOANS Consolidation Loan.

"The MEDLOANS Consolidation Loan provides the in-depth counseling our graduates need when deciding whether and how to combine their Stafford, Perkins and other federal education loans," said Cindy DeLone, director of student financial affairs at Drexel University College of Medicine in Philadelphia. "Even more valuable is the opportunity for our students to earn literally tens of thousands of dollars in interest savings." For example, assuming an interest rate of 4 percent, a medical school student could reduce the cost of repaying a $100,000 consolidation loan by more than $30,000.

Borrowers who have attended schools of allopathic or osteopathic medicine are eligible for a MEDLOANS Consolidation Loan including: borrowers with one or more eligible loans owned by Sallie Mae; borrowers with eligible loans issued under the Federal Family Education Loan Program (FFELP) and that are owned by more than one lender; or borrowers with federal education loans issued by the Federal Direct Loan Program. MEDLOANS Consolidation Loan borrowers must have a minimum initial loan balance of $10,000.

The AAMC and Sallie Mae encourage borrowers to seek expert advice before deciding whether and when to consolidate by calling 800/622-6214. The MEDLOANS Consolidation program is supported by a specially trained group of customer service representatives who can provide expert guidance on the myriad consolidation issues facing medical school graduates, including how to take advantage of deferment and forbearance options and how to select a repayment plan. The MEDLOANS Consolidation program offers borrowers a variety of flexible repayment options, including standard, extended, graduated (interest-only payments) and income-sensitive repayment. Borrowers can repay their MEDLOANS Consolidation Loan with terms up to 30 years, based on their total education loan indebtedness.

The MEDLOANS Consolidation Loan carries no application fee, no credit check and no prepayment penalties. Borrowers can apply for a MEDLOANS Consolidation Loan online using e-signature capability at www.aamc.org/medloans. E-signature streamlines the application process by allowing students to apply for a consolidation loan, review their rights and responsibilities online and submit their "signatures" electronically. The capability, available 24 hours a day, eliminates the need for borrowers to sign a hard-copy form to complete the processing of their application, minimizing the time it takes to obtain a consolidation loan and the cost of postage. Borrowers also may obtain an application by calling 800/622-6214, or download a paper application via the Web by visiting www.aamc.org/medloans.

The Association of American Medical Colleges represents the 125 accredited U.S. medical schools; the 16 accredited Canadian medical schools; some 400 major teaching hospitals, including Veterans Administration medical centers; more than 105,000 faculty in 98 academic and scientific societies; and the nation's 66,000 medical students and 97,000 residents.

Sallie Mae is the nation's leading provider of education funding, managing more than $78 billion in student loans for more than seven million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Celebrating its 30th anniversary this year, the company opened its doors in May 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, Sallie Mae's parent company name has changed, most recently to SLM Corporation (effective May 17, 2002). Through its specialized subsidiaries and divisions, the company also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical outsourcing services for colleges and universities. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.

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The Association of American Medical Colleges is a not-for-profit association representing all 129 accredited U.S. and 17 accredited Canadian medical schools; nearly 400 major teaching hospitals and health systems, including 68 Department of Veterans Affairs medical centers; and 94 academic and scientific societies. Through these institutions and organizations, the AAMC represents 109,000 faculty members, 67,000 medical students, and 104,000 resident physicians. Additional information about the AAMC and U.S. medical schools and teaching hospitals is available at www.aamc.org/newsroom.

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