Laila Keith
Sallie Mae offers private student loans for undergraduate, graduate, residency, and parent loans. The company does not refinance its own loans or any other student loans. If you are unsatisfied with the customer service or repayment terms, you can refinance with other lenders like SoFi, Credible, ELFI, and Earnest. Sallie Mae also does not offer loan forgiveness programs.
| Characteristics | Values |
|---|---|
| Interest rate type | Variable |
| Repayment options | Fixed, Deferred, Interest |
| Interest rate discount | 0.25% for auto-debit enrollment |
| Loan types | Undergraduate, graduate, residency, parent |
| Loan amount | $1,000 - total cost of attendance |
| Loan term | 10 or 15 years |
| Credit check | Required |
| Prepayment penalty | None |
| Loan refinancing | Not offered |
| Loan forgiveness | Not offered |
What You'll Learn
Interest rates and repayment options
Interest Rates
Sallie Mae offers variable and fixed interest rates on its loans. Variable interest rates may increase over the life of the loan, whereas fixed rates remain the same. The interest rate offered to a borrower will depend on factors such as their credit history and financial situation.
Repayment Options
Sallie Mae provides several repayment options for its loans, including Fixed, Deferred, and Interest Repayment. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option, and unpaid interest is added to the loan’s current principal at the end of the grace/separation period. Borrowers can also choose a repayment term that suits their needs, with options of 10 or 15 years.
To receive a 0.25 percentage point interest rate discount, borrowers or cosigners must enroll in auto-debit through Sallie Mae. Additionally, last year, students with cosigners were four times more likely to be approved for a loan, and 88% of Sallie Mae undergraduate loans were cosigned.
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Cosigning a Sallie Mae loan
Cosigning a loan is a legally binding agreement that you're willing to share the responsibility of repaying the loan on time and in full. Cosigners are typically parents, but they don't have to be; they can be a relative, guardian, friend, or spouse. A cosigner must be a creditworthy adult with a good credit history and an understanding of their financial responsibilities.
When you cosign a Sallie Mae loan, you agree to repay the loan if the borrower can't. The borrower must be enrolled for at least half the time that the loan covers. Sallie Mae offers undergraduate, graduate, and parent loans. Private loans can close payment gaps after maxing out aid.
The Smart Option Student Loan allows the borrower to choose an interest rate type and repayment option that works for their situation. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option, and unpaid interest is added to the loan's Current Principal at the end of the grace/separation period. To receive a 0.25% interest rate discount, the borrower or cosigner must enroll in auto-debit through Sallie Mae.
If you're cosigning a Sallie Mae loan, you should know that the borrower can apply to have your cosigner released after they've graduated, made a certain number of on-time principal and interest payments, and met certain credit requirements. The borrower must prove they can pay back the loan on their own.
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Private vs federal loans
Federal student loans are offered by the U.S. government to help students cover their education costs at eligible schools. The Department of Education issues these loans under the William D. Ford Federal Direct Loan Program. The department owns over 92% of U.S. student loan debt. Federal loans provide the same fixed interest rate to all borrowers and offer protections that private lenders don't, such as access to federal deferment and forbearance options, and student loan forgiveness and discharge programs. Federal student loans also have lower interest rates and multiple repayment plans. Direct subsidized loans, for instance, are offered to undergraduate students based on financial need, and the federal government covers the interest during and just after college.
Private student loans, on the other hand, are issued by banks, credit unions, and other lenders. Students usually turn to private student loans when federal loans cannot cover all their costs. Private student loans allow borrowers to choose their lender and offer a choice between fixed and variable interest rates, and repayment terms between five and 20 years. Private loans can also help cover payment gaps after maxing out aid. However, borrowers must pass a credit check to qualify, and because most college students don't have enough credit history, a parent will likely need to co-sign.
When deciding between federal and private student loans, it is essential to consider your specific circumstances and financial situation. Federal loans are often the best option due to their fixed interest rates, lower costs, and additional protections. However, private loans can be useful for filling funding gaps when federal loans are insufficient. Private loans may offer more competitive interest rates and repayment options, but they lack the borrower protections provided by federal loans.
Sallie Mae, originally founded in 1973 as a federally guaranteed student loan program, now offers private student loans for undergraduate, graduate, residency, and parent loans. Their Smart Option Student Loan allows borrowers to choose an interest rate type and repayment option that works for them. To receive a 0.25% interest rate discount, borrowers or co-signers must enrol in auto-debit. However, it is worth noting that Sallie Mae does not disclose its minimum credit score requirements, and borrowers cannot see a personalized rate with a soft credit check.
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Customer service and reputation
Sallie Mae's customer service team can be contacted via phone, email, or in-person at their corporate office in Delaware. The phone number for the customer service team is (888) 272-5543, and their support hours are 8 am to 9 pm ET Monday to Thursday, 8 am to 8 pm ET on Friday, and 8 am to 8 pm ET on Saturday. The mailing address for general correspondence is PO Box 3319, Wilmington, DE 19804-4319, and the headquarters address is 300 Continental Drive, Newark, Delaware 19713, United States.
The School AssistSM team can be contacted for questions or help regarding private loan originations or any loan serviced by Sallie Mae. The phone number for existing student loan customers is 800-472-5543, and their support hours are Monday–Thursday: 8 a.m. to 8 p.m. ET, Friday: 8 a.m. to 5 p.m. ET.
Sallie Mae has received mixed reviews for its customer service. While some customers have praised the company for their helpful and efficient assistance, others have complained about the company's service.
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Refinancing options
If you're considering refinancing your Sallie Mae student loans, it's important to understand the difference between refinancing and consolidation. While these terms are often used interchangeably, they refer to two distinct processes. Refinancing involves a company purchasing all your current student loans and issuing a new loan to pay them off. On the other hand, consolidation allows you to combine multiple federal student loans into a single loan with a fixed interest rate, calculated as a weighted average of the interest rates on your previous loans. This consolidation option is available through StudentLoans.gov for federal loans and through private lenders for private student loans. However, you cannot consolidate federal and private loans together under the federal program.
Before deciding to refinance your Sallie Mae loans, it's advisable to verify certain factors. Firstly, ensure you have copies of your current financial statements, including tax returns, W-2s, bank statements, and student loan statements. Secondly, research and compare interest rates offered by different lenders, as refinancing may provide you with a lower interest rate. Additionally, consider whether you might lose any benefits associated with your current loan, such as repayment options or Public Service Loan Forgiveness. Also, be mindful of any service fees associated with refinancing, and assess whether you might lose any discounts previously offered by your original loan provider.
If you choose to refinance your Sallie Mae loans, there are several alternative lenders you can consider. SoFi, a large lender, offers benefits such as financial planning services and no fees. Additionally, SoFi provides banking, credit cards, and insurance services, allowing you to potentially consolidate multiple financial services with one company. ELFI is another option that offers competitive rates and the ability to refinance the total balance of your Sallie Mae loans. They also assign a dedicated student loan advisor to assist you throughout the process. Earnest is a third alternative that provides an estimate of your rates before submitting a full application, allowing you to make an informed decision without impacting your credit score. They also offer perks like the ability to skip one payment per year without penalty and the choice between biweekly and monthly payments.
It's important to note that refinancing your student loans can be a way to reduce your monthly payments and save money over the life of your loan. However, it's essential to do your research and consider all your options before making any decisions. Consult with a financial advisor, tax advisor, or attorney to ensure you understand the implications of refinancing and make the choice that best aligns with your financial goals.
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Frequently asked questions
No, you cannot refinance a Sallie Mae loan with Sallie Mae because the company does not refinance its own loans or any other student loans. However, if you are unsatisfied with the customer service or repayment terms, you can consider refinancing with other lenders like SoFi, Credible, ELFI, and Earnest.
No, Sallie Mae does not offer loan forgiveness. The government provides student loan forgiveness on some federal student loans, but private lenders generally do not offer these types of loan forgiveness programs.
Yes, you may be eligible for a lower interest rate if you have a stable job and a good credit score. You can also receive a 0.25 percentage point interest rate discount if you or your cosigner enroll in auto-debit through Sallie Mae.
Yes, you can release your cosigner without refinancing your Sallie Mae loan as long as you meet certain criteria. As your loan nears the end of the repayment term, more of your monthly payment is applied to the loan balance than to interest.
