Sallie Mae is a company that currently offers private student loans, but it has gone through several shifts. In 1972, Congress created the Student Loan Marketing Association (
While newer Sallie Mae loans don't qualify for forgiveness, you may have other options. Find out if one of these strategies can help you better manage your debt.
All Sallie Mae loans taken out since 2014 are private. The best way to determine if you have federal or private student loans is to check studentaid.gov. If you need to borrow money for college, exhaust federal student loans before taking out a private student loan.
Federal student loans are broken down into four categories: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans.
Is Sallie Mae trustworthy for loans? Sallie Mae earned an A+ from the Better Business Bureau, and the company has been offering student loans since the mid-20th century. It has FDIC insurance for the other financial products it offers customers including credit cards, personal loans and savings accounts.
Cons Explained
No refinancing option available: Certain lenders offer student loan refinancing, but Sallie Mae does not. Limited repayment terms: Sallie Mae only offers repayment terms of 120 to 180 months.
If you signed up for a Sallie Mae loan when you entered college, you may have a high interest rate because you were a college student with no credit history and no full-time income. If you have a stable job and a good credit score now, you'll likely be eligible for a lower interest rate.
In 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.
Review your billing statement
If you have a recent billing statement, your loan servicer will be listed. Look for the servicer name at the top of your billing statement. If the name matches with one of the loan servicers listed above, the debt is a federal loan.
A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college.
Our Smart Option Student Loan® gives you the money and tools you need for your undergraduate journey. Lowest rates shown include the auto debit discount. Only the most creditworthy applicants who choose the interest repayment option may receive the lowest rate.
Navient Corporation is an American student loan servicer based in Wilmington, Delaware. Managing nearly $300 billion in student loans for more than 12 million debtors, the company was formed in 2014 by the split of Sallie Mae into two distinct entities: Sallie Mae Bank and Navient.
Today, Navient and Sallie Mae are distinct, separate companies. But they were once under the same umbrella company. When Sallie Mae started in 1972, it serviced federal student loan debt. It eventually took on private student loans, too.
There are private college loans for students in undergraduate, graduate, certificate, dental, medical, and health profession programs. Sallie Mae also offers private student loans for graduates studying for the bar exam, or relocating for medical and dental residencies.
You're not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.
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.
StudentAid.gov is the U.S. Department of Education's comprehensive database for all federal student aid information. This is one-stop-shopping for all of your federal student loan information.
The good news is that student loan payments don't have to go on forever. If you have federal student loans and are making payments under an income-driven repayment (IDR) plan, you may be able to have your loans forgiven after 20 years.
If you qualify for student loan forgiveness or discharge in full, and have applied if necessary in your case, you will get a notification and will no longer need to make payments. In some cases, you may even get a refund, depending on the program you applied under.
Lawsuits later revealed that one set of these predatory Sallie Mae private student loans had default rates ranging “between 50 and 92 percent every year from 2000 to 2007,” and that Sallie Mae's own expectations were that these loans would default at rates as high as 92 percent.
In December 2007, a class action lawsuit was brought against Sallie Mae in a Connecticut federal court alleging that the company discriminated against African American and Hispanic private student loan applicants by charging them high interest rates and fees.
Navient was also accused of convincing students to take out subprime private loans (loans with super-high interest for people with bad credit), even though Navient (which was Sallie Mae at the time) knew those students were unlikely to be able to make their loan payments later.
Typically, prequalifying for a student loan includes a soft credit check, which does not affect your credit score. Thus, if you apply for a loan with Sallie Mae, a hard credit check will be done, which could temporarily hurt your credit score.
There's no penalty for paying early or paying extra. If you make an additional payment while enrolled in auto debit, it won't change the amount we withdraw.
Sallie Mae does not have a maximum amount that you can borrow. Sallie Mae permits students to borrow up to the full cost of attending a qualified school, minus any financial aid they may have received.