RESTON, Va. — Sallie Mae this week said it is now offering no-fee checking accounts and MasterCard Debit cards to universities that in turn can be used by the millions of students with whom it has lending relationships.
The new Sallie Mae No-Fee Student Checking account and debit MasterCard will provide students immediate use of tuition refunds and financial aid payments and will be deposited by the respective universities and colleges into the company's FDIC-insured Sallie Mae Bank subsidiary, which offers some of the best CD rates.
The account is not offered directly to students by Sallie Mae but instead through the college or university the student is attending. The new account is part of the company's Campus Solutions suite of products which also include interest-free tuition payment plans, electronic billing and payment processing, and student loans.
The new banking accounts are the latest extension into financial services for the student loan giant, which has been forced into a new diversification by the termination of the federally guaranteed student loan program. The Sallie Mae franchise is huge, reaching millions of students at more than 1,000 colleges.
Sallie Mae has had an ambiguous relationship with credit unions. It was founded in 1972 to facilitate a secondary market for federal guaranteed student loans originated by credit unions and banks, then became a major competitor under a privatization that saw it become the nation's biggest originator of federal loans. With the phase-out of the guaranteed loan program, Sallie Mae is looking for new markets in which to compete.
Students can use the checking account's Debit MasterCard for no-fee PIN and signature-based point of sale transactions wherever MasterCard is accepted.
The debit cards can be used for cash withdrawals at 35,000 surcharge-free ATMs around the country. Banking services include bill pay, check writing, transfers and links to other bank accounts.
