Federal student loans are often considered the best due to their lower interest rates, flexible repayment options, and potential for forgiveness programs. They are generally more favorable compared to private loans, which may have higher interest rates and fewer repayment options.
A $30,000 private student loan can cost approximately $159.51 per month to $737.38 per month, depending on your interest rate and the term you choose. But, you may be able to cut your cost by comparing your options, improving your credit score or getting a cosigner.
For most students and families who decide to borrow, federal student loans are the best option. Repayment on federal student loans doesn't start until after you leave school, and with fixed interest rates and payment plans, monthly payments can be manageable.
Federal student loans are made by the government, with terms and conditions that are set by law, and include many benefits (such as fixed interest rates and income-driven repayment plans) not typically offered with private loans.
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.
Federal student loans are the most common type of student loan. There are four main types of federal student loans: subsidized, unsubsidized, parent loans, and consolidation loans. There are also private student loans, which generally have higher interest rates and stricter requirements.
Average Student Loan Payments
As of May 30, 2023, the average monthly payment for federal student loans was estimated to be about $500 per month when adjusted for inflation. However, the final number depends on the type of loan, loan amount, interest rates, and repayment plan.
For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount.
Tuition payment plans
Tuition installment plans can be an alternative to student loans if you can afford to pay tuition over fixed payments. Payment plans generally vary by college or university, but in addition to breaking up the payments, schools do not generally charge interest.
The timeline can vary a lot—it could be just a few days or several weeks. It depends on when you submit your application, when your semester starts, and any delays from lenders or the type of loan you're looking into.
If you're an undergraduate, the maximum combined amount of Direct Subsidized and Direct Unsubsidized Loans you can borrow each academic year is between $5,500 and $12,500, depending on your year in school and your dependency status.
For example, the interest on a $30,000, 36-month loan at 6% is $2,856. The same loan ($30,000 at 6%) paid back over 72 months would cost $5,797 in interest. Even small changes in your rate can impact how much total interest amount you pay overall.
A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college.
Many financial “experts” say you should always pay with cash when possible. They apply this rule to all debts, including credit cards, auto loans, home loans, and yes, student loans.
The most common types of federal student loans are Direct Loans, Parent PLUS Loans, Graduate PLUS Loans, Stafford Loans, Consolidation Loans, Perkins Loans, and Federal Family Education Loans (FFEL).
When you (and your cosigner, if you have one) pass the credit review, you'll be notified that you're approved. It can take as few as 15 minutes to find out whether you've met their credit requirements. If the lender needs more information, the approval can take a few business days.
Lender Sallie Mae used to offer federal student loans, and if you received one, you may be able to qualify for loan forgiveness. But federal student loan forgiveness can be hard to get — and if you have a private student loan through Sallie Mae, federal forgiveness is not available.