While the federal government remains the largest source of student loans in the U.S., working with a private lender can be a smart decision. And Sallie Mae Bank, a publicly traded company, is reportedly the biggest in the business. It allows undergraduate, graduate, and even vocational students—and their parents—to borrow up to the total cost of their college costs and have up to 15 years to repay the loan.

However, Sallie Mae loans do have their drawbacks. Here’s what you need to know about Sallie Mae, so you can make an informed decision.

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Pros

  • Loans available to often-neglected groups, including part-time students and non-U.S. citizens

  • Death and disability discharge available

  • Cosigner release possible after just 12 months

Cons

  • Late fees apply

  • Prequalification not available

Pros Explained

  • Loans Available to Often-Neglected Groups – Many lenders restrict applicants to students who are U.S. citizens and enrolled in school at least half-time. With Sallie Mae, you may qualify for a loan even if you're a part-time student or foreign born (including, as of this writing, DACA students).  
  • Death and Disability Discharge – Unlike many lenders, Sallie Mae will discharge (forgive) the loan balance if the student dies or becomes totally and permanently disabled—even if parents actually hold the loans. That’s a big advantage over many other lenders' loans, including federal Parent PLUS loans
  • Cosigner Release – You can request that your cosigner be removed from your Sallie Mae loan after just 12 months of on-time payments. Other private lenders usually require you to make on-time payments for several years before you can request a cosigner release. 

Cons Explained

  • Late Fees – If you miss a payment, Sallie Mae will charge you a late fee that is equal to 5% of the amount of the past-due payment, up to a maximum of $25. Other lenders, such as Discover, don't charge any fees at all, including late fees.
  • No Prequalification Some lenders, such as SoFi, allow you to prequalify for a loan. By answering just a few basic questions, you can find out if you'd qualify and get a rate estimate without affecting your credit score. Unfortunately, to see if you qualify and what your interest rate would be at Sallie Mae, you have to submit an application and undergo a hard credit inquiry, which can impact your credit score.

Student Loans Offered by Sallie Mae

Sallie Mae offers a wide range of student loans, including professional loans, residency loans, and bar exam loans. 

Undergraduate Student Loans

If you're a dependent undergraduate student—meaning you depend on your parents at least partially for financial assistance—then the most you can take out in federal direct subsidized and direct unsubsidized loans per year is $5,500. 

You’ll likely need more than that to cover your tuition and room and board, so Sallie Mae's undergraduate student loans can help fill the gap. You can borrow up to the total cost of attendance, and there are no origination fees or prepayment penalties.

Variable Rates 2.75% to 10.65%
Fixed Rates 4.74% to 11.85%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms Five, 10, or 15 years
Lowest rates shown include an auto debit discount

Career Training Student Loans

If you’re going to school for professional training or to get a certificate in a trade—such as culinary school or technical school— you can get financing through Sallie Mae's Career Training Smart Option Student Loan. You can borrow up to the total cost of attendance, even covering expenses such as a laptop and meals, and there are no origination fees or prepayment penalties. 

Variable Rates 5.74% to 13.11%
Fixed Rates 6.62% to 13.83%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms Five, 10, or 15 years
Lowest rates shown include an auto debit discount

Graduate School Loans

If you're pursuing a master's degree, Sallie Mae’s graduate school loans can be a smart alternative to federal Grad PLUS loans. Grad PLUS loans have high interest rates—7.08% as of 2020. They also have high disbursement fees: 4.236% for loans disbursed before Oct. 1, 2020.

Sallie Mae's graduate school loans have no origination fees, and the repayment term is 15 years in length.

Variable Rates 3.75% to 9.40%
Fixed Rates 5.50% to 10.23%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms 15 years
Lowest rates shown include an auto debit discount

MBA Loans

An MBA loan from Sallie Mae is targeted toward those attending business school, in pursuit of a master's degree in business administration. It can cover up to 100% of your school-certified expenses, and, after you graduate, it offers a six-month grace period and up to 48 months of deferment during an internship.

Variable Rates 3.75% to 9.40%
Fixed Rates 5.50% to 10.23%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms 15 years
Lowest rates shown include an auto debit discount

Dental and Medical School Loans

Dental and medical school loans from Sallie Mae have a loan term of 20 years, giving you more time to repay the loan and a more affordable monthly payment. There is a 36-month grace period during the start of your career, and you can borrow up to the total cost of attendance of your program.

Variable Rates 3.75% to 9.11%
Fixed Rates 5.49% to 9.98%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms 20 years
Lowest rates shown include an auto debit discount

Dental and Medical Residency and Relocation Loans

Sallie Mae’s medical residency and relocation loans can be used to cover the costs of your board examination fees, travel, and moving expenses. You can borrow up to $30,000, and there are no origination fees or prepayment penalties.  

Variable Rates 4.49% to 10.99%
Fixed Rates 6.52% to 12.00%
Loan Amounts $1,000 to $30,000
Loan Terms 20 years
Lowest rates shown include an auto debit discount

Law School Student Loans

For law school students, you can borrow up to the total cost of attendance with Sallie Mae's law school loans. The loans have a nine-month grace period and offer a 48-month deferment during your clerkship or fellowship. There are no origination fees and no prepayment penalties.

Variable Rates 3.75% to 9.16%
Fixed Rates 5.50% to 9.99%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms 15 years
Lowest rates shown include an auto debit discount

Bar Study Loans

While you study for the bar exam, you can use a Sallie Mae bar exam loan to cover your fees and living costs. You can borrow up to $15,000 and have 15 years to repay the loan. 

Variable Rates 4.52% to 11.44%
Fixed Rates 5.75% to 12.68%
Loan Amounts $1,000 to $15,000
Loan Terms 15 years
Lowest rates shown include an auto debit discount

Parent Student Loans

Federal PLUS loans have the highest interest rates and disbursement fees of any federal loan. As of 2020, the interest rate on Parent PLUS loans is 7.08%, so opting for a private loan from a lender such as Sallie Mae may be a cost-effective alternative—if your financials qualify you for the lowest rates.

You can borrow up to the total cost of attendance at your child's program. And while Parent PLUS loans are only available to parents of undergraduate students, Sallie Mae parent student loans can be taken out to pay for your child's undergraduate, graduate, or certificate degree. 

Variable Rates 5.00% to 11.62%
Fixed Rates 5.49% to 12.87%
Loan Amounts $1,000 up to the total cost of attendance
Loan Terms 10 years
Lowest rates shown include an auto debit discount

Loan Eligibility

To qualify for a student loan from Sallie Mae, you must meet the following requirements: 

  • Borrowers must be the age of majority (18 in most states). 
  • Borrowers must be U.S. citizens or permanent residents. DACA students or foreign residents can apply if they have a U.S. citizen co-signer.
  • You or your cosigner must have sufficient income.
  • You or your cosigner must pass a credit check.

Is Loan Prequalification Available? 

Unfortunately, Sallie Mae does not offer loan prequalification. To find out if you'd qualify for a loan and to see what rate you'd get, you have to fill out a full loan application and undergo a hard credit inquiry. 

Loan Fees

Sallie Mae doesn't charge origination fees or prepayment penalties. However, there is a late fee if you miss a payment, 5% of the missed payment amount, up to a maximum of $25. If a payment is returned to you, there is a $20 returned check fee. 

Loan Discounts 

If you sign up for automatic payments, Sallie Mae will reduce your interest rate by 0.25%. 

Repayment Options

Aside from the standard principal-and-interest repayment method, in which you pay both principal and interest right away, even when you're in school, Sallie Mae has three other repayment options:

  1. Deferred With deferred repayment, you don’t make payments while the student is in school and during the grace period. Deferred repayment is available for undergraduate, graduate, medical school, dental school, MBA, and law school student loans. Parent student loans and career training loans aren't eligible. 
  2. Fixed Under a fixed repayment plan, you pay $25 per month while you’re in school. Once you graduate and after your grace period, you begin paying the principal and interest. Career training, undergraduate, graduate, medical school, dental school, MBA, and law school loans are eligible for fixed repayment. 
  3. Interest If you choose the interest-only repayment option, you’ll make monthly interest payments while in school and during the grace period. Parent, career training, undergraduate, graduate, medical school, dental school, MBA, and law school student loans qualify for interest repayment. 

Other student loans, such as residency loans and bar exam loans, don’t require you to make payments while you’re enrolled at least half-time and during your grace period. 

Sallie Mae does offer some extra benefits to borrowers. You’ll get four free months (worth $100) of Chegg Study, an online tutoring program that offers study support for any subject and hundreds of textbooks. You also get free access to your FICO score, which is updated quarterly. You can view your score when you log into your account. 

Are Cosigners Required? 

Sallie Mae doesn’t require you to have a co-signer. However, it strongly recommends that you add one to your application. According to the company, students are nearly four times more likely to be approved with a co-signer than if they applied on their own. As noted above, Sallie Mae does allow you to apply to have your co-signer removed after a year

Forbearance and Loan Discharge Options

If you’re having trouble affording your payments, Sallie Mae may be able to offer you forbearance. You could temporarily postpone your payments for up to three months at a time, for up to 12 months over the life of your loan. 

Sallie Mae will discharge any loan if the student dies or becomes completely and permanently disabled. 

Length of Time for Loan Approval and Disbursement

The time between loan approval and loan disbursement can be lengthy. Once your loan is approved, Sallie Mae will send a certification request to your school. Many schools only certify requests 30 days before enrollment begins. Even if you applied for a loan months in advance, you may not hear back about the funds you need until a few weeks before school begins.

Once the school certifies the request, Sallie Mae will disburse the funds directly to the school. Any extra money that’s left over, known as a student loan refund, will be issued to you. 

Is Student Loan Refinancing Available? 

No, Sallie Mae does not offer student loan refinancing. If you want to refinance your loans, check out the best student loan refinance companies

Customer Service

Sallie Mae is its own loan servicer. The Annual Report of the Consumer Financial Protection Bureau Private Education Loan Ombudsman does not include Sallie Mae in its roundup of complaints about private student loan lenders. On Trustpilot.com, Sallie Mae has just a few reviews and a 2.6 TrustScore (out of a possible 6). Complaints center on loan terms and customer service.

Customer support is available by calling 855-756-5626. Support staff is available during the available times: 

  • Monday through Thursday: 8 a.m. to 10 p.m. ET
  • Friday: 8 a.m. to 9 p.m. ET

Customer service is also available via chat. We used this feature to ask a few questions about borrower eligibility and loan terms and found the agents to be very responsive and knowledgeable. We had answers to our questions within minutes. 

Apply for a Sallie Mae Student Loan

Before applying for any private student loan, make sure you complete and submit the Free Application for Federal Student Aid (FAFSA). The FAFSA is what the government and most schools use to determine what financial aid you’re eligible for, including grants and federal student loans. 

If you still need money to pay for school, you can then apply for a Sallie Mae student loan. To complete the online application, you’ll have to enter the following details about yourself: 

  • Permanent Address
  • Social Security Number (of both borrower and co-signer, if applicable)
  • School Information
  • Requested Loan Amount
  • Employment Information (including employer name and income)
  • Financial Information (including bank account numbers and monthly mortgage or rental payments)
  • Name and Contact Information for Two Personal Contacts

Once you submit your application, you could receive your results in as little as 15 minutes. 

Is a Sallie Mae Loan the Right Fit for You?

College costs have skyrocketed in recent years, and federal direct subsidized and direct unsubsidized loans have strict caps on how much you can borrow. If you need additional money to pay for school, using a private student loan from a lender such as Sallie Mae can be a good option.

On the plus side, Sallie Mae offers a wide range of loans, with multiple repayment options, for students of all types. It also has loan forbearance and discharge programs that compare favorably to federal loan discharge policies, and it allows you to apply for a cosigner release in just 12 months, setting it apart from other lenders. However, on the annoyance side, Sallie Mae doesn't allow you to get a rate quote before you apply.

Whether Sallie Mae’s interest rates are more competitive than other lenders, including the federal government’s, is a more complicated question. Much depends on your financials. While Sallie Mae’s lowest rates are lower than the fed’s, you’ll probably only qualify for them if you have an excellent credit score—otherwise, you’ll probably end up paying about the same or even more. The lender does offer variable interest rates on its loans, unlike the government—and that can be an advantage in a declining-interest-rate environment.

Before making a decision, make sure you compare offers from other private student loan lenders

Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders. We collected over 45 data points across more than 15 lenders—including interest rates, fees, loan amounts, and repayment terms—to ensure that our content helps users make the right borrowing decision for their education needs.