Sallie Mae Student Loans — An In-depth Review

Sallie Mae is a consumer banking company that provides student loans in the U.S. It has helped over 30 million American students get the funding they need and, in fact, is the nation’s leading provider of education funding. While Sallie Mae originally provided federally guaranteed loans on behalf of the U.S. Department of Education, it now exclusively offers private student loans.

Number of American students who have received a Sallie Mae student loan.

Here’s everything you need to know about Sallie Mae student loans. If you already have a Sallie Mae loan and want to refinance or reduce your rate, read this article “How to Refinance a Sallie Mae Student Loan.”

Sallie Mae loan products

Sallie Mae provides loans for a wide range of situations, which will be covered below. Although their rates are not as low as prime student loan providers, such as SoFi and LendKey, they do make it easy for students to get access to credit. Sarah Navin, who used Sallie Mae to earn her BA in Communications had this to say: “The pros of Sallie Mae? They easily hand out money to students in need and I needed that money to get through school. The cons? The interest rates are high. I would advise anyone I know to shop around and compare rates, and only consider them as your very last option.”

“The pros of Sallie Mae? They easily hand out money to students in need and I needed that money to get through school. The cons? The interest rates are high. I would advise anyone I know to shop around and compare rates, and only consider them as your very last option.”

There are various interest rate repayment options available, so here’s a brief overview of what you should know.

Interest rate options

Sallie Mae offers fixed and variable interest rates. Some loan products allow the borrower to choose which interest rate type they prefer, while others only give you one option.

A fixed interest rate does not change over time. You get your rate and it remains the same throughout the life of your loan, despite changes in the market, which ensures predictable monthly payments. Variable rates start lower but will fluctuate over time, which causes your payment to change. This means less predictability and more risk, but the possibility of paying less for the total cost of your loan.

Repayment options

Sallie Mae also offers various repayment options. The interest rate you get will be impacted by the repayment option you choose, with rates being higher for the deferred payment options.

Deferred repayments

The first option is deferred repayment where you do not make any payments toward your loan until six months after graduation. The advantage here is that you don’t have to worry about loan payments while you are still in school.

The disadvantage is that this approach typically results in a higher interest rate, and the interest you don’t pay during the deferment is added to your principal amount at the end of your grace period.

Fixed repayments

The next option is fixed repayment where you pay $25 per month up until six months after graduation when your regular payments of principal and interest begin. The advantage here is that you can save more on the total cost of your loan than you would with the deferment option (Sallie Mae says an average of 12%) while having affordable monthly payments.

The disadvantage is that any interest that wasn’t paid will still be added to the principal of your loan when the grace period ends.

Interest-only repayments

The next option is interest-only repayments while you are in school, which means you pay the interest in full each month. This can save you an average of 25% on your overall student loan cost compared to the deferment option, says Sallie Mae, but will cost more in monthly payments than the other two options.

Lastly is the option to repay both interest and principal in monthly payments from the beginning. This is the fastest way to repay the loan and will likely cost less overall, but the monthly payment will be the highest, which can be hard to manage while in school.

Now, let’s look at the various loan products available. Click here for the latest rates and terms.

Undergraduate student loans

These loans are for students going to school to earn their associate’s degree, bachelor’s degree, or a certificate from a degree-granting school.

Repayment options: Deferred, fixed, or interest-only

Career training student loans

These loans are for students undergoing trade certificate courses or professional training at a school that does not grant degrees such as culinary or beauty school.

Repayment options: Fixed or interest-only

Parent loans

Parent loans are for parents who want to finance their student’s undergraduate, graduate, or certificate education at a degree-granting school.

Repayment options: Interest or principal and interest

K-12 loans

These loans are for parents who want to finance the expenses involved with sending their children to a private school for kindergarten through 12th grade.

Repayment options: Principal and interest

General graduate student loans

These loans are for graduate students pursuing their master’s, doctorate, or law degree.

Repayment options: Deferred, fixed, or interest-only

MBA loans

These loans are for students pursuing their Master’s of Business Administration degree.

Repayment options: Deferred, fixed, or interest-only

Health professions graduate loans

These loans are for graduate-level medical degrees, such as for nursing or allied health.

Repayment options: Deferred, fixed, or interest-only

Dental and medical school loans

These loans are for students pursuing their dental, veterinarian, or podiatry degrees.

Repayment options: Deferred, fixed, or interest-only

Dental and medical residency/relocation loans

These loans are designed to cover the costs that come with dental or medical residency and relocation, such as board examinations, moving your residency, etc.

Repayment options: Principal and interest

Bar study loans

This loan is designed to help hopeful lawyers when studying for the bar exam.

Repayment options: Principal and interest

As you can see, Sallie Mae has quite a line-up of student loan options. The cost and structure will vary depending on what kind of education the loan is for.

Now, let’s look at some of the other aspects of getting a loan through Sallie Mae.

Considerations with Sallie Mae loans

Sallie Mae has many types of loans which can help a wide range of students and situations. The application is all online, making it extremely convenient. It doesn’t charge any origination fees or prepayment penalties, which is also helpful.

In addition to student loans, it also offers the Study Starter benefit, which provides students with a free trial of Chegg Tutors and Chegg Study aimed to help support students in their studies. Furthermore, the website is chock full of information on financing college, how to plan and prepare, and resources for finding other types of funding, like scholarships and financial aid.

The downside is that there will be payment penalties if you fall behind on your repayments, and interest will continue to accrue. While the company does have forbearance options, which allow you to pause payments for three months at a time for a total of 12 months throughout your loan, interest still accrues during that period and is added to the principal of your loan afterward.

The bottom line is that they offer reasonable interest rates, but, like any other type of loan, you will want to run the numbers to find out if the payments are reasonable for you while in school and afterward.

How to apply

To apply, you will need the following information during your application.

  • Your social security number
  • Your address and possibly previous addresses
  • Documents to show your finances (i.e. bank statements)
  • Documentation of your employment and income
  • Information on the school and program of study you are attending
  • Loan amount you need
  • The amount of financial aid you expect to receive from other sources
  • Two personal contacts

Here’s how to apply.

1: Visit the website homepage and click “I’m ready to apply.”

Step 1 Sallie Mae Student Loans

2: Choose the loan you want and click “Apply for this loan.”

Step 2 Sallie Mae Student Loans review

3: Provide your basic information, complete the loan application, and get your results.

Step 3 Sallie Mae Student Loans

Bottom line

Sallie Mae is a leading provider of private student loans that you should consider when financing your education. However, it is far from the only option available. Before committing to any lender, you should compare the rates, fees, and terms available. Visit SuperMoney’s student loans review page to compare the best deals available.

To learn more about Sallie Mae and the rate you qualify for, click here.

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