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long as they continue in the plan.
“Direct Repay is checkless, so on-time payment is guaranteed every month provided borrowers have sufficient funds in their accounts,” says Lydia Marshall, Sallie Mae senior vice president. “This helps borrowers avoid missed payments, makes it easier for them to maintain a good credit rating, and allows them to pay less on their student loans.”
Ms. Marshall notes that Sallie Mae can offer the interest rate reduction because loans that are paid electronically are less costly to administer. Through Direct Repay, the corporation will pass savings it realizes in servicing costs on to participating borrowers. The plan will be available initially to those Stafford loan borrowers whose loans are owned by Sallie Mae, are in repayment, and are serviced at one of its loan servicing centers. The plan will be available to all PLUS and SLS borrowers in July 1994.
In addition to Direct Reapy’s automatic 1/4 percent interest rate reducation, eleigible Stafford borrowers can reduce their rate further by qualifying for Sallie Mae’s “Great Rewards” benefit-a rate reduction of an additional two percentage points for borrowers who make their first 48 scheduled payments on time.
Sallie Mae, which buys education loans from originating lenders,, is the nation’s largest holder and servicer of such loans. Sallie Mae owns one in three guaranteed students loans outstanding today, representing financing for 5 million students and their parents.
94.9%