Sallie Mae Student Loans: Repayment Flexibility and Low Rates

  • on Sallie Mae's secure website
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Sallie Mae Student Loans: Repayment Flexibility and Low Rates

Sallie Mae is an excellent choice for borrowers attending undergraduate, graduate and professional training programs. The lender offers three different payment plans for borrowers seeking repayment flexibility.

Good for

  • Part-time students eligible.
  • Allows early-cosigner release when compared to other lenders.
  • Variety of repayment and deferment options.

Bad for

  • No refinancing or loan consolidation.
  • Lack of borrower incentives.
  • School must have existing relationship with Sallie Mae.

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Sallie Mae has one of the widest selections of repayment options offered by any lender, providing no less than 3 separate repayment options, early cosigner release and extended interest-only monthly payments. The lender also offers some of the lowest rates around for private student loans. However, Sallie Mae does not compete on loan consolidation or refinancing, nor does it give any borrower incentives aside from a 0.25% autopay discount, which is a commoditized discount that most lenders already offer.

Sallie Mae Student Loan Review: Should You Apply?

Sallie Mae provides more repayment flexibility than any other lender we've reviewed. This is a key feature, as it makes it easier for full-time and part-time students to budget their future paychecks towards repaying their loans. A private student loan from Sallie Mae can grant the flexibility and peace of mind that many students seek. The lender offers a variety of undergraduate, graduate, trade school and parent loans. Prospective applicants will need a good credit score (or a co-signer with good credit) to qualify.

Sallie Mae's student loan rates are low when compared to similar private lenders we've reviewed. Particularly attractive was the lender low variable rates. Most lenders typically bottom out at 4.5% when it comes to variable rates, however borrowers should understand that variable rates will change with the market.

Sallie Mae has more repayment options than you will find with other lenders, including a choice between fixed, fully deferred and interest-only repayment. The lender's low fixed monthly repayment and interest-only repayment plans provide borrowers with the opportunity to reduce their overall loan expenses without overburdening them in the short run. This can reduce overall loan expense and allow borrowers to take charge over their future payments.

Most lenders provide a six-month grace period after graduation, but Sallie Mae borrowers can further extend their loan terms by making interest-only payments for a year, even after their grace period expires. Under Sallie Mae's unique graduated repayment period, borrowers can elect to make interest-only repayments for up to one year after they leave school. This provides breathing room for borrowers who need extra time to get their finances in order after graduation.

Although most lenders prohibit co-signer release outright, or require at least three years of on-time repayments before allowing release, Sallie Mae accounts in good standing are able to apply for co-signer release after just 12 months of on-time repayments. This makes Sallie Mae attractive to borrowers who want to achieve financial independence as quickly as possible.

Where Sallie Mae doesn't shine are its incentives and interest rate discounts. The only discount it offers is the 0.25% autopay discount, which comes standard with most lenders these days. Additionally, many lenders like SoFi offer discounts for good grades and repeat customers, by contrast, Sallie Mae does not feature anything in this category.

Borrowers looking to refinance existing student loans are also out of luck, as Sallie Mae offers no loan consolidation or refinancing services to speak of, which are fairly typical functions provided by most other lenders.

Unique to Sallie Mae are its career training, parent and K–12 loans, which aren't commonly extended by other lenders—proving Sallie Mae caters to more than just undergraduates. Interested applicants should check out Sallie Mae's website for more information on its other loan products.

Sallie Mae Rates, Terms and Fees

  • on Sallie Mae's secure website
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A distinguishing feature of Sallie Mae's loans is they don't list a strict borrowing limit, and allow you to borrow up to 100% of your school's cost of attendance, unlike other lenders that may cap you at a certain level of outstanding debt. Eligible borrowers can fund as much of their school-certified expenses as they need. While most borrowers ideally won't need to test these limits, the extra capacity can be helpful for those who need it.

Smart Option Student Loan Features

Loan typePrivate student loan
Loan amount range$1,000 up to 100% school-certified expenses
APR range
  • 4.74% - 11.85%* Fixed rate
  • 2.75% - 10.65%* Variable rate
  • Late fee: yes
  • Prepayment penalty: none
  • Application fee: none
Loan terms5 - 15 years
Discounts0.25% rate discount with autopay

*Sallie Mae's lowest rates shown include Auto Debit discount.

Repayment Plans

Sallie Mae offers a range of repayment options for borrowers that vary by total expense and repayment flexibility. The plans below are generally offered across most of Sallie Mae's other loan products, with some exceptions.

Sallie Mae also offers a special graduated repayment period for borrowers transitioning into the workforce. Borrowers can elect to make interest-only payments for one year after leaving school, giving them more budget flexibility. Interested applicants can enroll either within the six-month billing period before principal and loan payments begin, or in the 12-month billing period after. The graduated repayment period is only offered under Sallie Mae's undergraduate and select graduate loans.

Deferred Repayment Option

Sallie Mae allows borrowers to automatically defer all their payments until after they leave school and for the six-month grace period after. This is typically the most expensive option because the interest that accrues over this period will be added to your total loan balance.

Fixed Repayment Option

Sallie Mae offers borrowers the option to make fixed monthly payments of $25 per month, until six months after they leave school. At the end of the six-month grace period, the monthly payments will automatically increase to your standard principal and interest payment amounts. This option is cheaper than the deferred repayment option, as it allows you to make manageable payments while in school.

Interest-Only Repayment Option

Borrowers who want to save the most money over the lifetime of their loans should consider Sallie Mae's interest-only repayment plan. This option allows borrowers to make monthly payments on the interest portion of their loans until six months after they leave school. At the expiration of the six-month grace period, the monthly payments will automatically increase to the standard principal and interest amounts. This option allows you to avoid interest capitalizing on your principal balance and is the cheapest option of the three.

Forbearance and Deferment

Sallie Mae borrowers can defer their payments when returning to college, going to graduate school, or entering an internship or residency program. Deferment allows you to temporarily reduce or pause your scheduled loan repayments to allow you to focus on your studies. However, borrowers should be aware that deferment will increase the total cost of the loan because interest continues to accrue during the deferment period.

Deferment is different from forbearance, as it's generally granted for borrowers pursuing further education. By contrast, forbearance is a need-based hold on your loan payments as a result of financial difficulties such as loss of employment or unforeseen medical expenses.

Permitted DefermentsLimit
Grace period upon leaving school6 months
In school or entering graduate schoolUp to 48 months
Internship, residency or fellowshipUp to 60 months in 12-month increments

Sallie Mae may grant forbearance for borrowers facing financial difficulty. The goal is to help borrowers avoid default. This is granted on a case-by-case basis, but it may be mandatory in scenarios specified by the U.S. Department of Education. We outline the conditions for discretionary forbearance below.

Permitted PeriodUp to 12 months (three month increments)
ConditionsRequires good-faith payment (applied to balance) of $50 per loan and $150 per account

How to Qualify for a Sallie Mae Student Loan

Sallie Mae is accessible to most borrowers, provided you're able to source a co-signer with decent credit. Sallie Mae reports that its average borrower or co-signer has an average credit score of 746. The majority of Sallie Mae borrowers list a co-signer on their applications.

Loans are offered to foreign nationals as long as they, or their co-signers, are U.S. citizens or permanent resident aliens. Additional documentation is required for non-U.S. citizens.

Credit scoreNot specified (average borrower/co-signer credit score of 746)
Co-signerYes, release permitted after 12 monthly payments
Accepted citizenship status
  • U.S. citizen
  • Permanent resident alien
  • Non-U.S. citizen with U.S. citizen/permanent resident alien co-signer
Part-time studentsYes
Eligible schoolsSchool must have existing relationship with Sallie Mae.

How Does Sallie Mae Compare to Other Student Loan Lenders?

Sallie Mae is one of the largest private lenders in the student loan industry. However, borrowers seeking student loans should thoroughly evaluate all options before committing to a lender. For those who wish to explore other options, read our lender comparison below.

Sallie MaeWells Fargo
Loan types offered
  • Private student loan
  • Private student loan
  • Student loan refinance
APR range*
  • 4.74% - 11.85%** Fixed APR
  • 2.75% - 10.65%** Variable APR
  • 5.94% - 11.26% Fixed APR
  • 5.04% - 10.93% Variable APR
Loan amount$1,000 up to 100% school-certified expenses$1,000 to $120,000 (All loans included)
In-school repayment optionsDeferred, Fixed, or Interest-onlyImmediate or Deferred
Part-time studentsYesYes
Co-signerPermitted: release eligible after 12 monthly paymentsPermitted: Release eligible after 36 monthly payments
  • 0.25% auto debit
  • 0.25% auto debit
  • 0.25% - 0.50% relationship discounts
  • *Rates include a discount with auto-pay
  • **Sallie Mae's lowest rates shown include Auto Debit discount.

Sallie Mae vs Wells Fargo

  • on Wells Fargo's secure website
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Existing Wells Fargo customers, or borrowers interested in opening a Wells Fargo checking account, will be better off with Wells Fargo, as the bank offers lucrative relationship discounts. Wells Fargo's rates are generally higher than Sallie Mae's. However, when combined with the bank's relationship and autopay discounts, borrowers can achieve combined savings of 0.50% to 0.75% off their interest rates, transforming Wells Fargo's student loans into some of the cheapest on the market. The bank grants relationship discounts for checking accounts, repeat student loan borrowers and Portfolio by Wells Fargo account holders. However, prospective applicants should be aware that only one relationship discount can be obtained per borrower, with the exception of autopay.

Sallie Mae vs Federal Loans

Borrowers looking to finance their education should evaluate federal aid options before applying for any private student loans. This is because both the subsidized rates and flexible benefits from federal loans almost always outweigh the benefits offered by private lenders. As an example, students who demonstrate financial need can qualify for subsidized Stafford loans, where the federal government covers interest costs while borrowers are enrolled in school at least half-time. This is far cheaper than the terms offered by any private lender. Federal student loans also offer unique income-based repayment plans that are not typically offered by private lenders. These allow your payments to fluctuate in accordance with how much income you're bringing in, which can be invaluable for borrowers entering an uncertain workforce. Finally, federal student loan applications are not credit-contingent (with the exception of the PLUS loan), which means that the likelihood of approval is much higher. We strongly recommend that borrowers fully explore all federal and state-level financing options before resorting to private lenders.

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