Glitch at Sallie Mae raises student loan payments

A computer programming error has forced Sallie Mae, the nation’s largest provider of student loans, to increase the monthly payments of 800,000 borrowers.

Letters informing the borrowers of the increase went out this week from company headquarters in Reston, Va.

Sallie Mae spokeswoman Kathleen deLaski said Wednesday the company expected 90 percent of the monthly increases to be $40 or less. The average increase, she added, should be $25 per month.

“It is our error and we’re sending out letters apologizing for it,” deLaski said.

The readjustment will affect borrowers with consolidated, or 10-year loans with variable rates — similar to adjustable rate mortgages.

The miscalculation will not affect the other 6.2 million student loans owned or managed by Sallie Mae, deLaski said.

She attributed the problem to an “installation error” that resulted in the entry of improper interest tables into company computers. The mistake resulted in a payment schedule that didn’t match the total amount of principal and interest owed by the borrowers.

DeLaski said borrowers unable to pay the added monthly amount may apply for a loan extension.