Sallie Mae Student Loans Review: Is It For You?

This is one of the largest providers of financial aid to students in the US.

It is a private company that offers plenty of loan options to college students who are seeking financial assistance.

Depending on the options you shall choose, Sallie Mae loans can either be issued directly to the college you attend or they can be given to the student applicant.

They were previously called Student Loan Marketing Association but changed their name to Sallie Mae. Initially, they had been set up as a government-sponsored enterprise.

However, in 2004, they were privatized. Their current official name is SLM Corporation which is what they are listed under on the NASDAQ, but Sallie Mae is the name they publicly trade under.

Their loan products are perfect for students and parents as well, and most especially students who wish to add on to their federal loan, which is not enough to cover their total cost of college.

Because Sallie Mae doesn’t have a specified loan limit, they are a very good option.

For students who are in residency programs for dental or medical, and also those studying for the bar exam, these loans have limits, but even with the limits, they are still higher than most other loan providers.

Sallie Mae Loan Rates and Terms

Rates and TermsPrivate Loans
Loan Amounts
  • From $1,000 and a maximum amount of 100% of the total cost of school attendance.
Fixed APR
  • 4.74 – 11.85%
Variable APR
  • 2.75 – 10.65%
Fees
  • Origination fee: None
  • Late fee: Yes. You shall either be charged 5% of the past due amount, or $25 whichever one of the two is less.
  • Prepayment fee: None
Time to Funding
  • 15 minutes
Loan Terms
  • 5 to 15 years
Soft Credit Check?
  • No

Sallie Mae Loan Requirements

Here are the main requirements for both refinancing and private loans:

RequirementsPrivate Loans
Minimum credit score
  • Not disclosed
Citizenship
  • Must be a US citizen, and if you are a non-US citizen, you must have a US citizen cosigner with good credit
Minimum Income
  • Not disclosed
Debt to Income Ratio
  • Not disclosed
Location
  • All states
Enrollment?
  • Only available to students attending school part-time.
Co-signer?
  • Yes
Deferment
  • Yes. In-school and military deferment
Bankruptcy?
  • Not disclosed

Benefits & Drawbacks Of Using Sallie Mae 

Before making a final decision, it’s important you’ll be aware of both the pros & cons. Let’s start with the benefits:

Choose a Repayment Plan

Once you have chosen the loan product you want, the company enables you to choose from their many different repayment plans.

You can opt to pay for the loan while still in school, which means that you shall be making $25 each month, or you can choose to pay interest only.

The company also offers the option for deferment, where you do not pay anything while enrolled in school.

Cosigner Release

Sallie Mae gives students with bad credit the option to still take out the loan by use of a cosigner.

Once you receive the loan and make 12 consecutive payments on it, you are allowed to release your cosigner and continue repaying the loan on your own.

This is a great benefit as it doesn’t tie the cosigner down forever.

Loan Discharge

In case a borrower dies or becomes permanently disabled, Sallie Mae discharges that borrower from the loan liability and they cancel the loan.

This is a great thing, especially for borrowers with dependents such as children or spouses, as the loan debt doesn’t affect them after you are gone.

No Loan Limit

In most cases, a lender will put a cap, as to the minimum and maximum amount they can give to a borrower. This is not the case with Sallie Mae loans.

It means that they can give you as much as you need to cover the total cost of college attendance, which includes room and board as well.

Quick Approval And Disbursement

From the time you apply for the loan, to when you receive it, the process with Sallie Mae takes around 15 minutes.

For students who may be looking for quick money, this is just perfect, and it helps you settle your responsibilities that much faster.

Forbearance

Forbearance allows you to stop making loan payments temporarily when facing financial challenges.

Sallie Mae offers this option to students who qualify for forbearance, and in turn, it doesn’t affect your credit. If you have lost your job, or you have a medical emergency, visit their website to find out how you can apply for forbearance.

Once approved, students can be given up to 12 months of non-payment, but this has to be in three-month increments. The total number of months over the life of a loan is usually 60 months. Interest shall, however, keep accruing during the forbearance period.

Deferment

As a student, you may wish to defer the payment of the loan for some time, or until you secure a job. Sallie Mae offers three types of deferments;

  • In- school – you can request the company to defer your loan payments while you are enrolled in school, until after graduation, or a few months after you graduate.
  • Military deferment – this is open to any borrower who is active in the military, and it enables them not to repay their loans during this period.
  • Internship – if you are in a fellowship or residency program, you can defer your loan payments up to 12 months, and a maximum of 60 months if you are a resident.

Study Smarter

This is a beneficial program for all Sallie Mae Borrowers.

It allows students to receive four months, where they can have access to free study tools and live tutoring sessions of 30 minutes each. This is offered by Chegg Tutors. You also get to view your FICO credit scores for free every quarter.

No Interest Rate Discounts

Other lenders usually offer their borrower discounts if they take other loan products from them, which can amount to almost 0.50%.

Sallie Mae, however, doesn’t have this option.

Loan Terms

Sallie Mae student loans are offered for a period of 5 – 15 years.

Other lenders allow students to choose their repayment terms and periods, and this usually corresponds to the monthly payments as well.

Don’t Do Pre-Approval

Pre-approval is necessary with loans, as it helps the borrower know beforehand that they shall be qualified for the loan.

Also, pre-approval only necessitates a soft credit check that does not influence the credit score, but Sallie Mae doesn’t do that.

They do a hard pull initially, whether or not you qualify for the loan, which essentially affects your credit score negatively.

Sallie Mae Repayment Plans And Options

Sallie Mae offers its customers a wide variety of in school as well as post-school repayment options which are;

In-School

While still in school, you can choose from the following options;

  • Paying the loan in full – This is what is known as immediate repayment, and the student has the option to repay the loan in full immediately after disbursement while they are still in school.
  • Defer payment – in this option, the student can request Sallie Mae to allow them to defer payments while they are still in school, or while they are students.
  • Fixed payment – Sallie Mae offers the option to pay only $25 per month while you are enrolled and also during the grace period after you graduate. During this time, the interest is usually 0.5% lower than in other periods.

Post-School Repayment Options

Sallie Mae offers solutions also for post-school borrowers:

  • Grace period – after graduation, this lender shall give you a 6-month grace period, within which you shall be looking for a job so you can start paying back the loan.
  • Deferment – if you decide to continue with schools, such as post-graduate degrees, or residency programs, you can be given an additional 48 months deferment period.
  • Post-grad interest – Borrowers can request paying interest only on the loan for at least 12 months.

Company Reputation And Customer Service

Sallie Mae manages their student loans in house, and they have a team of customer service agents who are always ready to serve the borrowers and offer them help whenever they need it.

On the Better Business Bureau website, it has received more than 200 customer complaints that mostly have to do with billing and collections.

They have answered and resolved most of them and received an A+ rating in terms of customer service.

Wrap Up!

Sallie Mae may not offer student refinancing loans, but they are at the top of the list due to their many products that are available to students.

This company has some of the best rates for private student loans, and the fact that they allow cosigner options means that almost all students can borrow and pay for school.

It is however unfortunate that they do not offer to refinance loans, and it is probably something that the company should look into, as most students are looking for ways to lessen their high-interest rate burdens.