Sallie Mae was founded in 1972 as a government-sponsored enterprise, providing federally guaranteed student loans. In 2004, it became a private company, and in 2014 it split into two companies: Sallie Mae Bank and Navient. The former serves as a consumer bank, offering student loans, credit cards, personal loans and savings options. The latter is a servicer of government student loans.
Sallie Mae now offers private student loans to undergraduates, graduate students, parents and student sponsors.
Low rates, low fees and flexible repayment options make this lender worth considering for anyone interested in borrowing for educational expenses. Other benefits include 100 percent coverage for school-certified expenses, opportunities to lower your interest rate and free study help.
Sallie Mae student loan snapshot
|Loan types||Undergraduate, graduate, career training, parent, K-12, MBA, medical school, medical residency,
dental school, dental residency, health professions graduate, law school, bar study
|Loan amounts||$1,000 minimum up to 100% of school-certified costs of attendance|
|Interest rates||Variable: 4.25% to 16.14% APR
Fixed: 5.49% to 12.87% APR
Includes autopay discount of 0.25%
|Repayment terms||Deferred: Make no payments while in school and in grace
Fixed: Make $25 payments every month while in school and in grace
Interest: Pay interest while in school and in grace
|Grace period||6 months to 3 years, depending on the loan type|
|Co-signer required?||No, but option available|
Who can take out a Sallie Mae student loan/who is it good for?
Sallie Mae is a great option for those interested in borrowing from a well-established lender with low rates, low fees and a variety of loan options. It could be a good fit for undergraduate students, graduate students, parents and sponsors of students who have exhausted scholarship, grant and federal loan opportunities.
It’s also a good choice for those who may need a cosigner. Students applying for an undergraduate loan are nearly four times more likely to be approved for a loan when they have a cosigner, according to Sallie Mae.
Qualification requirements to take out a loan vary by loan type. But overall, loans from Sallie Mae are available in every state. Borrowers typically must be at least 18 years old or have an eligible cosigner. You also must be applying for a loan from an eligible school — you can see if your school is eligible when starting a loan application through the lender’s website.
Interest rates and terms
Both fixed and variable interest rate options are available for most student loan products. Fixed rates range from 5.49 percent to 12.37 percent, while variable rates range from 4.25 percent to 16.14 percent.
Sallie Mae notes that only the most creditworthy borrowers who opt for the interest repayment option receive the lowest rates.
Here are the interest rate ranges for each loan product at Sallie Mae:
|Loan product||Variable rate||Fixed rate|
|Undergraduate||4.25% – 11.35% APR||5.49% – 11.85% APR|
|Graduate||4.50% – 10.11% APR||5.50% – 10.23% APR|
|MBA||4.50% – 10.11% APR||5.50% – 10.23% APR|
|Health professions||4.50% – 10.11% APR||5.50% – 10.23% APR|
|Law||4.50% – 9.86% APR||5.50% – 9.99% APR|
|Residency||5.21% – 11.67% APR||N/A|
|Bar exam||5.26% – 12.18% APR||N/A|
|Career training||6.49% – 13.83% APR||N/A|
|Parent||5.49% – 12.87% APR||5.74% – 12.37% APR|
|K-12||9.49% – 16.14% APR||N/A|
|Medical||4.50% – 9.86% APR||5.49% – 9.98% APR|
|Dental||4.50% – 9.86% APR||5.50% – 9.99% APR|
Fees and penalties
There’s no origination fee, application fee or prepayment penalty with loans from Sallie Mae. It will, however, charge a late payment fee of 5 percent of the past due amount up to $25 and a returned check fee of up to $20.
Repayment terms and grace period
The type of loan you need determines your repayment terms and grace period.
Undergraduate, graduate, MBA, health professions, dental school, medical school and law school student loans offer three main repayment options with a six-month grace period:
- Deferred: With the deferred option, you make no payments while in school and during the six-month grace period after leaving school. After that period of time, you pay principal and interest.
- Fixed: The fixed option requires you to pay $25 per month while you’re in school and during the grace period. Sallie Mae says that freshman students could save 14 percent on their total loan cost by choosing this option.
- Interest: You pay the interest on your loan while you’re in school and during the grace period. After that period, you pay interest and principal on your loan. Sallie Mae says that freshman students could save 29 percent on their total loan cost by choosing this option.
Parent, medical residency and dental residency loans allow deferred principal and interest payments while enrolled at least half-time and during the grace period. But deferred payments aren’t required. Payments can still be made while in school. Borrowers can also request interest-only payments for the first two or four years. The grace period for these loans is up to three years after graduation. It drops to nine months if you leave school or fall to less than half-time status while in school.
Principal and interest payments for K-12 loans begin within 30 days after the loan is sent to the school.
Sallie Mae gets an “A+” rating from the Better Business Bureau, the highest possible grade. The rating takes into account complaint history and whether the business has appropriately responded to complaints, resolved them in a timely matter and if it’s made a good faith effort to resolve those complaints.
Sallie Mae’s customer service department is available via phone or mail.
Those who wish to apply or cosign for a loan, complete a loan application or check the status of their application may call 855-756-5626.
For questions about existing loans, call 800-472-5543.
General correspondence with the company can be sent by mail to:
PO Box 3319
Wilmington, DE 19804-4319
Though Sallie Mae has several different loan options, the process for applying is generally the same across the board. Primary borrowers or cosigners can start the application process through the lender’s website.
In order to get started, you’ll need your address, Social Security number, school information (field of study, enrollment status and degree), period of enrollment, requested loan amount, employment information, financial information, two personal contacts and any financial aid or scholarships you’ll be receiving.
Here are the main steps to apply for a loan through Sallie Mae:
- Start the process on Sallie Mae’s website. After hitting “Apply for a Loan,” you’ll fill out your loan information and needs, including if you’re a student, cosigner, parent or sponsor, the loan type and school information.
- Fill out basic information, including your name, Social Security number and contact information.
- Start the loan application. Here you’ll answer questions and information about the loan amount desired, employment info, financial aid info and personal contacts.
- Submit the application and add a cosigner. You can choose to add a cosigner or apply on your own. Sallie Mae will review your credit history after you submit your application.
- Finish the loan process. After completing the application, Sallie Mae might request additional info. If approved, you’ll choose a variable or fixed interest rate option and repayment option. Cosigners will need to accept the terms and sign as well. Your eligibility will be certified with your school.
What to do if application is turned down
Contact the lender and ask the reason you were rejected for a loan. It could be that there was a processing error, or it could be that your credit isn’t strong enough. Either way, it’s important to know why your application was turned down so that you can correct those errors before applying to other lenders.
Remember, there are plenty of lenders offering student loans, and they are competing for your business. Discover, LendKey and SoFi, for example, all offer competitive rates, low fees and a variety of student loan options.
It’s important to shop around for the best deal. Getting a lower interest rate can save you thousands of dollars over the life of the loan.