Sallie Mae Student Loan Review

Rates are competitive and it offers financing for less than half-time coursework

Female Student Studying Textbook in Library with Other Students Studying Around Her.
•••

GILKIS - Damon Hyland/Getty Images

 

Sallie Mae is one of the best-known student loan lenders. Created by Congress in 1972, the company was subsequently privatized in 2004. It now offers only private loans and owns 1.4% of all outstanding student loans in the country. Sallie Mae stands apart from other loan providers as one of the few that lends to part-time students attending school less than half-time. 

Who is a Sallie Mae Student Loan Best For?

Sallie Mae student loans are an ideal choice for borrowers eager to have the shortest possible release period for a co-signer or who are going to school less than half-time and can't qualify for loans with most other private lenders because of that fact. Sallie Mae does not disclose the minimum required credit score to obtain one of its loans and you cannot find out your loan terms without a hard credit check. Despite these downsides, Sallie Mae may be right for you if you:

  • Want flexibility in repayment, as Sallie Mae's graduated repayment option allows interest-only payments for up to a year after leaving school
  • Need a co-signer to qualify but want your co-signer to be released from responsibility quickly, as Sallie Mae requires just 12 on-time payments for co-signer release.
  • Are enrolled less than half time in an eligible academic or career training program
  • Need to borrow between $1,000 and the total cost of attendance 

Pros & Cons

Pros

  • Allows co-signers, then enables co-signer release after just 12 payments

  • Offers financing for career training programs, for non-U.S. citizens, and for students attending school less than half-time

  • Gives limited free access to homework assistance service Chegg Study for some borrowers

Cons

  • Sallie Mae doesn't disclose the minimum required credit score to qualify

  • You can't find out eligibility or repayment terms without a hard credit inquiry

  • Sallie Mae has received many consumer complaints and was subject to legal action by the U.S. Department of Justice (DOJ) in 2014

Pros Explained

  • Allows co-signers, then co-signer release after just 12 payments: Co-signers can help you qualify for a private loan when you'd be ineligible if you just relied on your own credit history or earnings record. But co-signers are legally liable for repayment, which can be a burden. Sallie Mae offers one of the shortest periods for co-signer release, helping to ease that burden. 

Other lenders, such as College Ave, require 24 payments and some, like Discover, don't allow co-signer release at all.

  • Offers financing for career training programs, for non-U.S. citizens, and for students attending school less than half-time: Most private student loan lenders require you to be in school at least half time to qualify for student loans. And some require you to attend a degree-granting institution. Sallie Mae lets you borrow even if you're only able to go to a few classes at a time. And you can borrow to attend professional training or to get a trade certification at a non-degree granting institution. 
  • Gives limited free access to Chegg Study homework assistance service: Chegg Study provides solutions to problems in millions of textbooks, expert questions, and answers to help you solve study questions, as well as access to tutors. Undergrads borrowing through Sallie Mae get 30 minutes of free tutoring and four months of free access to Chegg Study's Textbook Solutions and Expert Q&A. The service is valued at $14.95 per month plus the cost of tutoring.

Cons Explained

  • Doesn't disclose the minimum required credit score:While some private lenders disclose what your minimum credit score must be to gain approval, Sallie Mae does not. This makes it difficult to determine eligibility or to decide if you need to apply with a co-signer. 
  • No eligibility or repayment terms without a hard credit inquiry: Many lenders allow you to get pre-qualified with a soft credit check, which doesn't affect your credit score. But Sallie Mae doesn't provide pre-approval, so you won't find out if you're eligible for a loan or what your rates are unless you submit an application. This means getting a hard inquiry, which dings your credit score. 
  • Many consumer complaints, and was subject to legal action by the U.S. Department of Justice (DOJ) in 2014: Sallie Mae settled with the DOJ in 2014 after being accused of charging excessive loan rates to military service members. It is also the subject of hundreds of customer service complaints on the Better Business Bureau website. 

What does Sallie Mae Offer?

Sallie Mae lends for several different purposes, including:

  • Undergraduate study
  • Career training for students pursuing education or training outside of a degree-granting institution
  • Parent loans 
  • Medical school 
  • Dental school 
  • Residency for medical or dental students
  • Health professions study, including graduate-level nursing programs and pharmacy programs
  • Law school 
  • Bar exam study 
  • Graduate school 

Sallie Mae Undergraduate Student Loan Rates & Terms 

  • Loan amount: Minimum $1,000, up to the school-certified cost of attendance
  • APRs: 4.74% to 11.85% fixed; 1.50% to 9.66% variable (lowest rates include auto-debit discount)
  • Terms available: Five to 15 years
  • Recommended credit score: Not given 
  • Grace period: Six months
  • Origination fee: None

Sallie Mae undergraduate loans offer flexibility in loan terms, access to Chegg to get help with your schoolwork, and discounts for autopay. You can apply once and get approved for the full school year and can borrow up to the school-certified cost of attendance. The application process takes about 15 minutes, but it can be as little as 10 days from the time you apply to the time your funds are disbursed to your school. 

Career Training Student Loan Rates & Terms

    • Loan amount: $1,000, up to the school-certified cost of attendance 

    • APRs: 6.62% to 13.83% fixed; 4.50% to 11.89% variable (lowest rates include auto-debit discount)

    • Terms available: Five to 15 years

    • Recommended credit score: Not given

    • Grace period: Six months

    • Origination fee: None

Not all student loan lenders offer loans to complete a program that doesn't grant a degree, so Sallie Mae stands apart with its career training loans. You have multiple repayment options, and will get free access to your FICO score quarterly so you can monitor how your borrowing and repayment affect your credit.

Parent Loan Rates & Terms

  • Loan amount: $1,000, up to the school-certified cost of attendance
  • APRs: 5.49% to 12.87% fixed; 3.75% to 10.37% variable (lowest rates include auto-debit discount)
  • Terms available: Up to 10 years
  • Recommended credit score: Not given
  • Grace period: None
  • Origination fee: None

Parent loans come with free access to Chegg for undergraduate students for four months, as well as the option to choose a fixed or variable rate. You get just 10 years to repay parent loans, though, while some lenders such as College Ave give you the chance to repay what you've borrowed over 15 years. A longer loan term results in lower monthly payments but a higher total cost. 

Medical School Student Loan Rates & Terms 

  • Loan amount: $1,000, up to the school-certified cost of attendance
  • APRs: 5.49% to 9.98% fixed; 2.50% to 7.87% variable (lowest rates include auto-debit discount)
  • Terms available: Up to 20 years
  • Recommended credit score: Not given
  • Grace period: 36 months 
  • Origination fee: None

Sallie Mae medical school loans offer a long grace period, so you don't have to worry about repayment as you get your career or practice off the ground. You also have the option to take up to 20 years to repay what you've borrowed, which can make covering the cost of a medical school education much more affordable in terms of monthly payments.

Dental School Student Loan Rates & Terms 

  • Loan amount: $1,000, up to the school-certified cost of attendance 
  • APRs: 5.50% to 9.99% fixed; 2.50% to 7.88% variable (lowest rates include auto-debit discount)
  • Terms available: Up to 20 years
  • Recommended credit score: Not given
  • Grace period: 12 months
  • Origination fee: None

In addition to giving you a 12-month grace period, the loan also allows you to defer payments for 48 months during your residency and fellowship. This, combined with flexible repayment options and the chance to repay your loans over 20 years, make Sallie Mae's dental school loans an affordable choice. 

Medical Residency Loans Rates & Terms 

  • Loan amount: $1,000 to $30,000
  • APRs: 6.52% to 12.00% fixed; 3.27% to 9.85% variable (lowest rates include auto-debit discount)
  • Terms available: 20 years
  • Recommended credit score: Not given
  • Grace period: Three years after graduation, or nine months if you leave school or drop below less than half-time status
  • Origination fee: None

Sallie Mae's medical residency loans help you cover the costs of studying for your board exams, moving for your residency, and paying board exam fees. You have a long grace period and the option to choose a repayment term lasting up to 20 years, which would mean more affordable monthly payments throughout your career. 

Student Loans for Health Professions Rates & Terms

  • Loan amount: $1,000, up to the school-certified cost of attendance 
  • APRs: 5.50% to 10.23% fixed; 2.50% to 8.20% variable (lowest rates include auto-debit discount)
  • Terms available: Up to 15 years
  • Recommended credit score: Not given
  • Grace period: Six months
  • Origination fee: None

These loans are open to those in graduate-level health professions. They offer an economical interest rate, flexibility in repayment options, and a 15-year repayment term so you can take your time to pay back what you're borrowing. In addition to the grace period, you also have the option to defer payments for 48 months during a fellowship or residency and to make 12 interest-only payments as you're getting your career off the ground. 

Law School Student Loans Rates & Terms 

  • Loan amount: $1,000, to the school-certified cost of attendance 
  • APRs: 5.50% to 9.99% fixed; 2.50% to 8.02% variable (lowest rates include auto-debit discount)
  • Terms available: 15 years
  • Recommended credit score: Not given
  • Grace period: Nine months
  • Origination fee: None

Law school loans from Sallie Mae provide flexibility, as they offer both a nine-month grace period and 48 months of deferment during a clerkship or residency. Eligible law graduates also have the option to make 12 months of interest-only payments as they get started in their profession. 

Bar Study Loans Rates & Terms 

  • Loan amount: $1,000 to $15,000
  • APRs: 5.75% to 12.68% fixed; 3.27% to 10.21% variable (lowest rates include auto-debit discount)
  • Terms available: 15 years
  • Recommended credit score: Not given
  • Grace period: Nine months 
  • Origination fee: None

When you incur expenses and fees associated with studying for the bar exam, you can use this loan from Sallie Mae to help you make ends meet. You can borrow as much as $15,000, and the money will be sent directly to you. You can opt to receive it all at once, or in two payments so you can better manage your spending. 

Graduate School Student Loans Rates & Terms 

  • Loan amount: $1,000, to the school-certified cost of tuition
  • APRs: 5.50% to 10.23% fixed; 2.50% to 8.20% variable (lowest rates include auto-debit discount)
  • Terms available: Up to 15 years
  • Recommended credit score: Not given
  • Grace period: Six months
  • Origination fee: None

If you're pursuing a master's or doctoral degree, Sallie Mae offers graduate school loans to help cover your costs for advanced study. Not only can you take up to 15 years to pay back what you've borrowed, but you also have the option to defer payments for 48 months during an internship or fellowship.

How to Get a Student Loan From Sallie Mae

Sallie Mae provides student loans to borrowers in all 50 states. You can apply online and must undergo a credit check to borrow. But while many eligibility requirements are similar to other lenders’, Sallie Mae stands apart for two reasons:

  • You can be enrolled less than half-time and still qualify for funding
  • Non-U.S. citizens (including Deferred Action for Childhood Arrivals [DACA] recipients) who are enrolled in a U.S. academic institution can apply for a loan with a U.S. co-signer

Repaying Your Sallie Mae Student Loan

Sallie Mae offers multiple repayment options and many of the same repayment terms as other lenders. For example, Sallie Mae enables you to put loans into forbearance and pause payments during times of hardship, and offers an interest rate discount if you set up autopay.

But Sallie Mae is unique in that it allows 12 months of interest-only payments after graduation if you need more time to work up to paying your full monthly loan payment.

Making interest-only payments on your loan means you will not reduce the principal balance. Your payments following the interest-only period will be higher than they would have been and your total loan cost will also be higher.

The Bottom Line

Sallie Mae has a lot to offer borrowers, including making loans available to people who normally might struggle to find them, such as students attending school on a part-time basis and non-citizens. Competitive rates and flexibility in repayment make it easy for borrowers to pay back what they owe on a schedule that works for them. 

But the fact that you need to undergo a hard credit check makes applying for a loan here less attractive for many, especially as Sallie Mae doesn't publish minimum credit scores, so it's hard to know before applying if you're likely to be approved.

Article Sources

  1. Sallie Mae. "Get a Student Loan for Next Semester." Accessed April 28, 2020.

  2. Sallie Mae. "Apply to Release Your Cosigner." Accessed April 28, 2020.

  3. Sallie Mae. "Smart Option Student Loan for Undergraduate Students." Accessed April 28, 2020.

  4. Sallie Mae. "Career Training Smart Option Student Loan." Accessed April 28, 2020.

  5. Sallie Mae. "Career Training Smart Option Student Loan." Accessed April 28, 2020.

  6. Sallie Mae. "Sallie Mae Parent Loan." Accessed April 28, 2020.

  7. College Ave. "Parent Loan Possibilities." Accessed April 28, 2020.

  8. Sallie Mae. "Sallie Mae Medical School Loan." Accessed April 28, 2020.

  9. Sallie Mae. "Sallie Mae Dental School Loan." Accessed April 28, 2020.

  10. Sallie Mae. "Sallie Mae Medical Residency and Relocation Loan." Accessed April 28, 2020.

  11. Sallie Mae. "Sallie Mae Graduate School Loan for Health Professions." Accessed April 28, 2020.

  12. Sallie Mae. "Sallie Mae Law School Loan." Accessed April 28, 2020.

  13. Sallie Mae. "Sallie Mae Bar Study Loan." Accessed April 28, 2020.

  14. Sallie Mae. "Sallie Mae Graduate School Loan." Accessed April 28, 2020.

  15. Sallie Mae. "Graduated Repayment Period." Accessed April 28, 2020.