Sallie Mae Private Student Loan Review

Written by: Kimberly Burton
Updated: 7/09/24

Navigating the world of higher education is an exciting journey, but it comes with its financial challenges. One of the most significant hurdles for many students is figuring out how to afford tuition, books, room and board, and other necessary expenses. While scholarships and savings can help, they often fall short of covering the total cost. This is where student loans come into play. 70% of college students turn to loans to bridge the financial gap.

The first step for many students is completing the Free Application for Federal Student Aid (FAFSA), which opens the door to various federal financial aid programs. These government-backed options often have favorable terms, such as lower interest rates and flexible repayment plans. However, for many students, federal aid alone isn’t enough, leading them to explore private student loans.

Private student loans offer a wide array of options, each with its own set of terms and conditions. Navigating these options can be like comparing apples to oranges. Interest rates, repayment terms, and loan limits can vary significantly between lenders. Understanding these differences and finding the right loan can be a complex and overwhelming process. 

Sallie Mae is one of these options.

Note that Sallie Mae has several options for student loans. Our analysis concentrated on the Sallie Mae Smart Option Student Loan. 

About Sallie Mae

Sallie Mae, originally called the Student Loan Marketing Association, was established in 1972 as a government-sponsored entity to support student loans. For nearly 30 years, it bought federally guaranteed student loans from banks, ensuring students could access funds for higher education.

Between 1997 and 2004, Sallie Mae transitioned to a private company, allowing it to operate more freely and enter new markets, including private student loans. Unlike federal loans, these private loans were not backed by the government and offered additional funding options for students.

Sallie Mae moved into private student lending due to the rising cost of higher education, which outpaced federal aid limits. Private loans provided more flexibility and could cover a broader range of expenses. Over time, Sallie Mae introduced various loan products with different terms to meet diverse financial needs.

Today, Sallie Mae is a key player in the private student loan market, helping millions of students finance their education with tailored loan solutions.

Ranking 10/10 due to its history in the student loan space and its recognition as a loan provider for millions of students.

Our Process

As with all loans, there are several things to consider.  These will be based on where you are attending school, how much you need to borrow, your (and if you have cosigners) credit scores, interest rates of the loan, and repayment terms.

We’re going to outline the features of Sallie Mae and how they compare to other lenders on a scale of 1 to 10 (A few factors we gave more weight to and those will be pointed out below.) 

Overall Ranking

After looking at more than 15 factors and comparing the most popular private student loans on the market, we’ve given Sallie Mae a 4.8 out of a possible 5 ranking. The gave them a #3 ranking on our list of loans with two other lenders ranking slightly higher. 

Keep reading to explore the details of applying for and obtaining a loan with Sallie Mae and to understand how we arrived at this ranking.

Who Can Apply?

Sallie Mae accepts applications from students who are US citizens and permanent residents who are attending an eligible degree-granting institution.  Unlike other lenders, Sallie Mae also considers students who are attending school at less than half-time enrollment.  Note that there are different rules on what you can and cannot use your student loan money for if you are less than part-time.

If you are not a US citizen, you need a cosigner who is a US Citizen or Permanent Resident. 

If you don’t meet financial, credit, or other criteria, a cosigner may be required.

Before starting the process, gather the following information:  address, social security number, school information including enrollment dates, degree, course of study, requested loan amount, other financial aid you expect to receive, employment, and financial information. 

Once the application is submitted, Sallie Mae takes 3-5 business days to provide you with an answer.  

If you choose a different school path such as culinary, aviation, or technical, Sallie Mae also offers Career training student loans.  These can be used for professional training, trade school, and certificate programs.  Contact Sallie Mae to ensure your chosen school is on their list of approved institutions.

While this did not factor into our rankings, your choice of school is a big deciding factor on whether you can apply for any loan.  If you do not follow the traditional school path, you can apply for a loan with Sallie Mae.

What is the maximum loan amount?

A specific loan limit is at the discretion of Sallie Mae.  They have a yearly limit of up to 100% of the school-certified cost of attendance.  Depending on your school, this can be quite high. 

The website does not mention a lifetime limit on student loans, but this is completely at the discretion of Sallie Mae as well.

Sallie Mae does require you to apply for a new loan each school year.

To ensure you take out enough loans to pay for college, but not too much to have you drowning in debt, you’ll need to do some calculations.  One rule of thumb is to not borrow more than what you anticipate you will earn in your first year in the working world.  

Are there any fees to apply? 

In addition to the cost of the student loan, lenders often add other fees for setting up and maintaining the loan. These costs can accumulate, so it’s wise to find a lender that waives them. Sallie Mae does not charge origination, application, or prepayment fees. This helps borrowers budget their student loan costs more effectively, ensuring that more of the loan amount goes towards actual educational expenses.

This is a definite pro.  The lower the fees, the more affordable the loan is over time.

Ranking 10/10 because less fees are always a plus!

Can I pay the loan off early?

There is no penalty for paying off your loan early.

Once you leave school, there is generally a 6 months grace period before you need to start making loan payments; however, some students prefer to start paying on the loan early as making payments while still in school can lower the total cost of your loan. 

Sallie Mae offers several repayment plans.

The first is to make small, fixed monthly payments while in school and during the grace period.  This may reduce the overall cost of the loan as interest starts accumulating from day one.

The second is to pay only the interest that accrues each month while in school and during the grace period.  This prevents interest from being added to the principal balance and reduces the overall loan cost.  

The third is to make full principal and interest payments immediately after the loan is granted.  By starting to pay right away, you build credit and get a head start on becoming debt-free. 

Sallie Mae offers a Graduated Repayment Period for some loans, where you can choose interest-only payments for the first year after the grace period and then transition to full payments afterward. 

Keep in mind that interest will accumulate no matter what option you choose so beginning payments as soon as possible will save money and build credit. On the other hand, not having to worry about payments until after graduation allows students to focus on their studies without immediate financial burden.

Borrowers can choose from various repayment terms, ranging from 10 to 15 years, allowing for more personalized repayment plans.

This is a pro, offering flexibility depending on your financial situation.

Ranking 9/10 because of multiple repayment options, but some lenders have more.

While Sallie Mae may offer a discount if your payments are automatically debited from your bank account, this is not a requirement for repayments. If you do choose this option, you’ll save up to .25% on your interest rate.

Ranking 15/15 based on other borrower benefits as an auto-debit from your account is not required. Note that we gave more weight to this category because it’s an important factor for borrowers when managing repayments.

Sallie Mae allows a 6-month grace period before loan repayments are required. This can allow borrowers to get more established in their jobs before needing to factor in student loan payments.

Ranking is 8/10, as some lenders on our list allow longer periods.

Are there payment deferment options?

Private loans typically offer fewer deferment options compared to federal loans, making them less flexible if financial difficulties arise.

Private loans also lack federal protections, such as forgiveness programs and extensive deferment options, which can be crucial for some borrowers.

Plus, interest accrues during in-school deferment periods for unsubsidized loans, increasing the overall loan balance.

These features are a con with any private loan and not a disadvantage for any private lender. 

Ranking 9 out of 10 due to several deferment options (some lenders offer more), which we outlined in the payment section above.

Do I need a parent to cosign the loan?

While some students can qualify for student loans themselves, they likely will need a cosigner to qualify for a larger loan.  This person is generally a parent or a close relative with established good credit.  

There is an option to release the cosigner after a set number of on-time payments (12), which releases the cosigner’s burden and allows the student to better their credit score.  This is the lowest period of time before a release is allowed among the lenders we evaluated.

We consider this a pro as it offers the cosigner an opportunity to release themselves from the loan if they choose.

Ranking 15 out of 15 due to the number of months before the release can occur. Note that we gave more weight to this factor with the highest lenders allowing release after 12 months of payments.

The better the credit rating of the borrowers or their cosigners will determine interest rates and loan amounts.  Good to excellent credit will qualify for the best rates. Establishing a strong credit history or finding a qualified cosigner with excellent credit is essential to accessing competitive loan terms.

This can be a con based on your credit history, but personal circumstances do not affect our ranking.

Ranking 15/15 as the minimum FICO score required for the loan is 650.  Note that we gave this more weight in the rankings as the ability to obtain the loan at a lower interest rate is very important to most borrowers.

Sallie Mae has a Parent Student Loan option where the person taking out the loan, often a parent, leaves the student out of the process altogether. This is an option for parents to support their child’s education by taking on the financial responsibility themselves. This can protect the student’s financial future while potentially securing better loan terms through the parent’s established credit history. 

Sallie Mae Parent Student Loans have two repayment options: make interest-only payments while your student is still in school and during the 6-month grace period after they leave school or start making full principal and interest payments immediately after the loan is disbursed.

What is the application process?

Sallie Mae’s application process is a little slower than other lenders, taking up to 3-5 business days to receive a decision.  Fill out the application online with personal, financial, school, and cosigner information.  Sallie Mae representatives may ask for more documentation during this process. 

Unlike other lenders we looked at, Sallie Mae pulls a full credit report, which is reported to the credit reporting agencies. 

Once approved, you will sign a document agreeing to the terms before Sallie Mae works with your school to cover all education expenses. If you applied for money over and above the cost to the school, they will send you the remainder of the funds.  

Students do have to re-apply each year, but 95% of students whose financial situation and cosigner remain the same are approved in subsequent years.  The application process after the first year is much quicker.

Ranking 5/10 based on the full credit report. Other lenders offer a “soft pull” of the credit report, which is not reported to the credit-reporting agencies.

How competitive are the rates?

Sallie Mae rates include an auto-pay discount (0.25%), which means that you must set up direct payment from your bank account. Automatic payments are not required to obtain the loan, but can save you money. 

Loans can be set up with fixed or variable rates.  While variable rates can seem attractive when setting up the loan, the interest rate can fluctuate over time, potentially increasing the total cost of the loan.

At the time of this article, rates on the website show:

Fixed Rate Loans range from 4.25% – 15.49% APR

Variable Rate Loans range from 5.37% – 15.70% APR

If you can lock in a fixed-rate loan with an excellent credit score, your loan will be significantly lower than starting with a variable rate and seeing it rise to the upper percentage rates.

Ranking 10/10 based on the options of both fixed and variable rates; however, depending on credit score, these rates may not be advantageous when you are ready to sign your loan.  We encourage you to shop around for the best rates. 

Based on the competitiveness of variable and fixed rates at the time of this article, Sallie Mae was not the lowest among all the lenders we ranked. As a result, it brought their overall score down.

Are there other resources available?

The Sallie Mae website provides resources and tools to help students and their families on their college journey, including financial calculators, answers to questions related to financial aid, and other valuable information about college and career choices.  

The website also provides a Scholarship Search tool to find other forms of aid and a contest to win up to $2,000 to help pay for school. Do you need some music to help you study?  They’ve got that too.

If you have further questions, you can call their customer service line.

Ranking 10/10 due to Special Product Features in addition to just the loan.

What else should you consider?

We investigated the rating provided by the Better Business Bureau (BBB), which gives consumers confidence in a business’s reliability and trustworthiness. The rating is based on factors like customer complaints, transparency, and adherence to BBB standards. A higher BBB rating indicates that a business resolves customer issues effectively and operates ethically. It serves as a measure of transparency and accountability, showing how well a business treats its customers and handles disputes.

An A+ rating ranked 10 out of 10 on our scale.

Ranking 10/10 based on feedback from borrowers and an overall ranking of A+.  We encourage you to look up any lender we review on their website at

We also looked at other reviews for our private student loans. If the loan was reviewed on major financial sites, we considered this a plus to the visibility of the loan. While this is a small factor in whether to consider a loan, we do recommend careful research when comparing this loan to others.

Ranking 9/10 based on a 4.5 review from NerdWallet. 

Does Sallie Mae offer other loans?

We focused on undergraduate private student loans in our analysis, but Sallie Mae also offers graduate student loans for MBA, medical school, medical residency, other health professions, dental school, dental residency, law school, and bar study loans.

Later, if you find yourself struggling with multiple or large loans, there are options for loan consolidation and refinancing.


Here’s a summary of the pros and cons of a private student loan with Sallie Mae:


  • Leader in Private Student Loans
  • Competitive Interest Rates
  • Loan Amount up to 100% of the Cost of Attendance
  • No Fees
  • Flexible Repayment Terms
  • 12-Month Cosigner Release Option
  • A+ Rating by the BBB
  • Solid Rating from NerdWallet


  • Relatively High Variable Interest Rates
  • Must Reapply Each Year
  • Likely will Need a Cosigner to Qualify
  • Full Credit Report Pulled During Application Process
  • Approval Takes Several Days
  • No Income-Driven Repayment Plans
  • Interest Accrual During In-School Deferment Periods
  • Lack of Federal Protection

Overall Ranking

Based on our set of criteria, we rank Sallie Mae at 4.8 out of 5.

Next Steps

Navigating private student loans can be complex, as we’ve explored in this review. We strongly recommend evaluating multiple options thoroughly before reaching a decision. Visit lender websites, talk with their representatives, and prioritize key features based on your needs.

Your choice of loan will be influenced by various factors, each carrying different levels of importance to your specific situation. Taking these steps ensures you’re well-informed and positioned to select the loan that best fits your financial and educational goals.

To learn more about additional private student loans, explore our other reviews and resources.

Click Here to Apply now to Sallie Mae Private Student Loans

About the Author

Kim Burton is a versatile content and technical writer residing in the scenic mountains of Colorado. A lifelong learner, Kim enjoys crafting insightful articles on finance, technology, marketing, nutrition, real estate, and self-care. She holds a bachelor’s degree in Marketing and is a certified nutrition coach. As a mother preparing her child for college, Kim has conducted thorough research into the student loan process, equipping herself with a wealth of knowledge to navigate this complex financial landscape. When she’s not writing, Kim enjoys hiking, creating, gardening, and hanging out with her family.