Those who borrowed from Sallie Mae after this 2014 split have private student loans, which aren't eligible for federal forgiveness programs. However, Sallie Mae will discharge debts for borrowers who die or become totally and permanently disabled.
No, private loans have no forgiveness option. And it's highly unlikely discover would ever reduce what's owed, they have no reason or incentive to do so.
Sallie Mae currently offers private student loans for undergraduate, career training and graduate programs. It also provides parent loans and is one of the few lenders to offer loans to part-time students.
Sallie Mae stopped originating federal student loans in 2010. Today, we exclusively offer private student loans. Even before we offer a private student loan, we help student and families build an effective and responsible plan to pay for college with a three-step approach.
After a referral from the CFPB, in 2014, the Department of Justice and the Federal Deposit Insurance Corporation ordered Navient and its predecessor, Sallie Mae, to pay almost $100 million for illegally overcharging nearly 78,000 servicemembers.
Are Sallie Mae loans better than federal student loans? In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not.
One of the primary reasons to prioritize federal student loans is because they tend to have lower interest rates. Right now, the average student loan rates range from 6.53% to 9.08% for federal loans, while their private counterparts range from 3.74% to 17.99%.
If your loan becomes past due while enrolled in this option, we'll withdraw both the Current Amount Due and the Past Due Amount if that amount is greater than your Designated Amount. There's no penalty for paying early or paying extra.
The average credit score for approved Sallie Mae borrowers is around 748 for undergraduate student loans. That's pretty high – but don't panic if your credit score is much lower than that. You'll need a minimum credit score (or have a cosigner with a minimum credit score) that is somewhere in the mid-600s.
To get rid of them, you'll need to pay off the balance in full or qualify for a loan forgiveness option like Public Service Loan Forgiveness or Total and Permanent Disability Discharge. Read more about how to get a copy of a student loan promissory note. Learn More: Do Student Loans Go Away After 20 Years?
Pay Off High-Interest Loans First
With this approach, you pay off your loans from the highest interest rate to the lowest. You make the minimum payments on each balance except the highest-rate loan. You also make an extra monthly payment based on how much you can put toward the debt.
No, there is no way to change private student loans to federal loans. However, you can refinance your private and federal loans together, ideally to qualify for a lower rate or better loan terms.
Thus, if you ever had a Sallie Mae loan or had Sallie Mae conduct loan servicing, that loan and servicing, likely, was transferred to Navient. Further, Navient then changed its name in 2021 to Aidvantage. See here.
Any borrower with ED-held loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if the loans are not currently on an IDR plan. Borrowers with FFELP loans held by commercial lenders or Perkins loans not held by ED can benefit if they consolidate into Direct Loans.
Deferring payments lets you reduce or postpone your payments. When you request a deferment of a Sallie Mae undergraduate student loan, you won't have to make principal and interest payments while you're in school or during your internship, law clerkship, fellowship, or residency.
Sallie Mae loans, now serviced by private lenders, do not qualify for federal forgiveness programs. Loan forgiveness is generally reserved for federal student loans under specific programs. Private student loans might offer assistance or flexible terms, but typically lack formal forgiveness options.
A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college. Here are the types of student loans. (Keep in mind that not all students are eligible for every loan.)
The Cancel/Refund Loan function allows you to perform full loan cancellations or full or partial refunds for individual disbursements using the net return amount.
Sallie Mae is not a federal loan servicer.
But in 2014, it split into two separate companies. The Sallie Mae of today, however, is an education solutions company and consumer banking business. The other company became Navient. Importantly, the two companies are independent and not associated with one another.
Types of federal student loans
Direct Subsidized Loans. Direct Unsubsidized Loans. Direct PLUS Loans, of which there are two types: Grad PLUS Loans for graduate and professional students, as well as loans that can be issued to a student's parents, also known as Parent PLUS Loans.
This scholarship has been verified by the scholarship providing organization.
On-campus room and board: These include your dorm expenses and any meal plan you purchase; the school will automatically deduct these from your loan if you've signed up for them. Off-campus housing: If you live off-campus, these eligible expenses can include rent, utilities, and groceries.
Bankrate's take: Sallie Mae is a great option for those interested in borrowing from a well-established lender with low rates, few fees and a variety of loan options. It is also one of the few lenders that allows borrowers to be part-time students.