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Sallie Mae Student Loans: What They Offer And How They Work

Hanna Kielar5-Minute Read
December 21, 2021

Going to a college or university is expensive. The obvious solution many folks pursue is to take out federal or private student loans, and even then some aspiring students can struggle to qualify or find a repayment plan that suits their respective financial situations.

That’s where Sallie Mae can come in. Sallie Mae offers a wide variety of private loan options for those who might not be eligible for federal student aid, and flexible repayment plans to make the years following graduation a little easier to manage. What exactly is Sallie Mae, though? This article will give you its history and standing, and a complete guide to the financial aid they can offer.

What Is Sallie Mae?

Originally formed in 1973 as the Student Loan Marketing Association (SLMA), Sallie Mae – as it’s widely known now – is a publicly traded corporation that provides private student loans to those who qualify. It was created as a government-sponsored enterprise (GSE) and became fully privatized by Congress in 2004.

Sallie Mae formerly serviced both federal and private loans, but in 2014 it split into two entities. Sallie Mae Bank continues to provide consumer banking and private student loans, while Navient continues to service federal student loans.

Private loans from Sallie Mae can provide students who don’t qualify for federal student aid with the funds needed to pursue their education. This includes part-time students. Additionally, Sallie Mae’s private student loans don’t charge origination fees, and they offer in-school deferments and provide multiple flexible repayment options.

Types Of Loans Offered By Sallie Mae

Sallie Mae offers numerous types of educational loans:

  • Undergrad and graduate loans
  • Parent loans for parents to finance their children’s education
  • Law school and bar study loans
  • Medical school and residency loans
  • Dental school and residency loans
  • Master of Business Administration (MBA) loans
  • Career training student loans
  • Health professions graduate loans
  • Private schooling loans for grades K – 12

To see all loan options, visit the Sallie Mae website.

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How Do Sallie Mae Student Loans Work?

Federal subsidized and unsubsidized student loans can have strict caps on the amount you can borrow, while Sallie Mae private loans can be a little more flexible. As with other servicers, Sallie Mae student loans have certain requirements you must meet, an application process and options for repayment to choose from based on your situation.

Eligibility And Requirements

In order to qualify for a loan from Sallie Mae, you must meet the following requirements:

  • You must be enrolled in a degree-granting institution as a full-, half- or part-time student. A certificate or seasonal courses may also apply.
  • You must be working toward a degree – bachelor’s or associate – or a certificate.
  • You must be a U.S. citizen or have a co-signer who is.
  • You are subject to a credit check to determine your liability for repaying the loan.
  • Sallie Mae does not disclose a minimum required credit score, but most approved borrowers have an average score of 748.

It should be noted that Sallie Mae does not offer prequalification, and eligibility is only determined after filling out a student loan application.

How To Apply

You can fill out an application for a Sallie Mae loan right on their main website (click “Apply for a loan” in the top right corner of their homepage). Have the following information and documents ready when you apply:

  • The name of the school or institution you currently, or plan to, attend
  • What type of degree, major or course of study you’re pursuing
  • The semester of enrollment and what year you are in school
  • The amount you want to borrow
  • What other financial aid you intend to receive, and from what sources
  • Your current employment and income, if applicable
  • Current address, and previous address(es) if you’ve lived at your current address for under 1 year
  • Your Social Security number and bank account information
  • The amount of your monthly housing payment, if applicable
  • At least two personal references

Sallie Mae also allows students to have a co-signer, who must submit their information at the same time or separately, as well as a co-signer release option. You, as the borrower, are eligible to remove your co-signer from the loan after your graduation or the completion of your program, and after making 12 on-time payments.

The application itself will take about 15 minutes to fill out, and if approved, you could receive your loan in as little as 10 business days.

Repayment Options

Sallie Mae offers the option to choose when you begin making full interest and principal payments on your loan, though you don’t have the option for an income-driven repayment plan like with federal loans.

You can choose between these three repayment options when you borrow through Sallie Mae:

Deferred: You will not make payments while you are attending school or during your 6-month grace period. This will result in a higher interest rate and possibly higher payments over time.

Fixed: Under a fixed repayment plan, you’ll pay $25 a month while attending school and during the grace period. This can limit the amount of interest you accrue over time.

Interest: You make monthly interest payments while in school and during the grace period. This will qualify you for a lower interest rate and keep your principal balance from growing too high.

Additionally, you can apply for loan forbearance for 3-month increments for a total of 12 months. Interest will still accrue over the course of your forbearance.

Preparing for your student loan repayments while still in college can go a long way in making your post-grad years a little easier.

Sallie Mae Pros And Cons

If all of this sounds good so far, remember that not everything is perfect. We’ve highlighted here the high points and the low points of borrowing from Sallie Mae:

Pros

  • Loans are available to part-time students and non-U.S. citizens who have a co-signer.
  • There is the option for co-signer release after only 12 months.
  • In the event of your death or a permanent disability, your balance will be waived.

Cons

  • There is no available prequalification.
  • There are higher maximum interest rates than with federal student loans.
  • Many of the repayment options involve accruing interest.

The Bottom Line

With school costs and tuition skyrocketing, it can help to have some additional funds to afford your higher education. Sallie Mae’s private loans could be that extra lift you need, with their flexible repayment methods, lighter eligibility requirements and openness to part-time students and non-citizens. In the end, it’s all up to your financial limitations and what you specifically will need.

For more financial advice, check out some other personal finance articles in the Rocket HQSM Financial Learning Center.

Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.