Sallie Mae Student Loans – Is it Really the Loan You Need?

When you think about student loans, it’s likely that Sallie Mae comes immediately to mind.

This company started out as a government-sponsored enterprise but went private in 2004. In 2014, Sallie Mae split into two companies—Navient Corporation, a federal student loan servicer, and Sallie Mae, a private student loan lender.

But, just because you recognize the name, doesn’t mean Sallie Mae is the best choice as your private lender.

Let’s look at Sallie Mae’s terms, eligibility criteria, and borrower protections to see if this company makes sense for your situation.

Overview of Sallie Mae Student Loans

Sallie Mae offers several private student loan products to student and parent borrowers. This includes:

• Undergraduate student loans
• Career training student loans
• Parent loans
• Graduate student loans

In the past, Sallie Mae also offered private student loan refinancing and consolidation services, but those services ended in 2008.

Pros of Borrowing a Sallie Mae Student Loan

• One of only a handful of borrowers that lends money to part-time students
• Death and disability discharge
• Non-U.S. citizens may be eligible with a U.S. citizen or permanent resident cosigner
• Cosigner release offered after just 12 months of on-time payments
• Funds can be used for select certificate programs or an associate degree or higher

Cons of Borrowing a Sallie Mae Student Loan

• A history of customer service complaints online
• Requires a hard credit check to see what rates you qualify for
• You don’t get to choose your own loan term
• Minimum financial eligibility requirements aren’t disclosed

Sallie Mae Student Loan Details

Credit Check

To see personalized rates from Sallie Mae, you’ll have to agree to a hard credit check. A hard credit inquiry shows up on your credit report, negatively affecting your score. Unfortunately, this means simply checking rates with Sallie Mae could affect the rates you get from another student loan company.

Other lenders offer rates and preapproval with just a soft credit inquiry. This is less risky because it doesn’t affect your score.

Rates

In October 2019, rates for Sallie Mae undergraduate student loans ranged from 3.12*% to 10.54% variable APR and from 4.74*% to 11.35% variable APR.  Rates continually fluctuate. You can check current Sallie Mae interest rates here.

*Rates include a 0.25% auto-pay discount.

Loan Term

Sallie Mae loan terms range from 5 to 20 years depending on the type of loan. For undergraduate student loans, terms range from 5 to 15 years. However, borrowers do not select what loan term they want; Sallie Mae assigns one based on your application. This means you get less control over your total monthly payment and the total overall cost of the loan.

Other lenders let borrowers choose their own loan term.

Borrowing Limits

Students can borrow up to the cost of attendance minus any financial aid received. Sallie Mae does reserve the right to limit borrowing more than that depending on the applicant and the circumstances. The minimum you can borrow is $1,000.

Fees

Sallie Mae doesn’t charge a prepayment penalty, application fee, or origination fee. This is excellent and on part with the best lenders out there.

However, Sallie Mae does charge a late fee of 5% of the amount of the past due payment up to a maximum of $25. Your payment is considered late if it is made more than 15 days past the payment due date. You can avoid late fees by setting up autopay or choosing a lender that doesn’t charge any.

Eligibility Requirements

Unfortunately, Sallie Mae doesn’t publish a list of specific financial eligibility requirements. However, in 2016, approved loan applicants had an average FICO score of 748. This suggests that you need a credit score in the upper 600’s to meet their minimum qualifications.

A big downside to a lender that doesn’t reveal their specific requirements is this—you won’t know for sure if you meet their minimum credit score and income requirements until you apply. With Sallie Mae, that means accepting a hard credit check without even knowing if you meet the minimum criteria.

Sallie Mae does allow cosigners if you want to boost your approval odds. Cosigners are also required for students who have yet to meet the age of majority (usually 18) in their state.

Bonuses

Sallie Mae frequently advertises bonus values you earn when you borrow a new student loan. For example, loans that first disburse between July 1, 2018, and April 30, 2020, include four months of free Chegg study help.

As a Sallie Mae borrower, you also gain access to free FICO credit score tracking.

Alternatives to Sallie Mae Student Loans

It’s always a good idea to do some research before choosing a lender. Compare Sallie Mae to the lenders we work with to see which one fits your needs best. All the lenders we partner with offer competitive interest rates, no fees, clear-cut eligibility requirements, and easy online applications.

Here are our trusted lenders:

Repaying a Sallie Mae Private Student Loan

Repayment Options

Sallie Mae lets borrowers choose between three in-school repayment plans:

Deferred repayment: No scheduled loan payments while you’re in school or during your grace period

Fixed repayment: A fixed monthly payment while you’re in school and in your grace period

Interest repayment: Interest-only payments while you’re in school and during your grace period

You’ll need to choose one of the above repayment plans when you take out the loan. Once you pick one, you cannot change it while you’re still in school or in your six-month grace period. You’re obligated to make the payments you commit to and face late fees if you fail to make those payments.

Sallie Mae offers an autopay discount of 0.25%, which drops your interest rate and keeps your payments timely. You can choose to auto-debit only the total amount due or you can auto-debit the total amount due plus an extra amount. Paying extra each month saves you money in the long run.

Sallie Mae doesn’t provide the option for biweekly payments, which is a perk you can find from other lenders.

Borrower Protections

Sallie Mae understands that borrowers face economic hardships and life changes.

Check out what borrower protections and forbearance options they offer:

• Grace period: Your first principal and interest payment is due six months after you are no longer enrolled in school
• Graduated repayment period: As you transition from school to work, you can make interest-only payments for a single year
• Death & Disability Discharge: If the borrower dies or becomes disabled, the entire loan amount is discharged. This applies to cosigned and non-cosigned loans.
• Internship, clerkship, fellowship, or residency program deferment: Borrowers may be eligible to defer their loan for the duration of the program (up to 60 months) so long as the program is approved by Sallie Mae
• Academic deferment: You can receive up to 48 months of academic deferment while you return to college or attend graduate school
• Military deferment: The interest rate is capped at 6% during eligible periods of military service
• Forbearance for financial difficulty: Up to 12 months of forbearance in three-month increments over the life of the loan
• Cosigner release: Available after 12 on-time full payments

Where Sallie Mae Student Loans Fall Short

Sallie Mae certainly knows student loans, and their products are a great option for students who are only enrolled part-time. But, this company does fall short in a few areas—areas worth exploring if you’re still considering Sallie Mae as your lender:

• Sallie Mae chooses your term length for you, meaning you lose control over your monthly payment and total overall loan costs
• You won’t know what rates you qualify for without a hard credit check, which affects your credit score
• Salle Mae doesn’t disclose its financial eligibility requirements, so you won’t know if you meet their minimum income and credit score requirements before applying
• You cannot make biweekly payments via autopay
• Borrowers only have 12 months of forbearance available whereas other lenders offer up to 24 months
• This company has a history of poor customer service reviews, and you aren’t assigned a personal loan advisor (an approach other student loan companies take)

Final Thoughts on Sallie Mae Private Student Loans

Before you borrow any money for college, make sure you exhaust your other financial aid options first. First use grants, scholarships, work-study, and any savings. Then, turn to federal student loans—subsidized followed by unsubsidized.

If you still need to borrow to cover costs, make sure you’re getting the best deal and the best support possible. As a private student loan lender, Sallie Mae works great for some borrowers, but others have struggled to receive help from their customer service team. Student loans are confusing, which is why we only partner with lenders that have an excellent reputation in customer service. Not to mention low rates and flexible loan terms and repayment plans.